3.1 Why Do O&G Social Investments Fail?
35
Critics of Philanthropy have alleged that benevolent articulations of philanthropic
programmes are inherently patriarchal (Ellwood, 1989; Jessop, 2002; Murray, 2006,
2008). They argue that philanthropic programmes marginalise certain social groups
of society, fostering the dependency of underprivileged groups on welfare resources
(Ellwood, 1989; Jessop, 2002; Murray, 2006, 2008; Torfing, 1999). For example,
several companies have been criticised for taking a paternalistic approach towards
their host communities (Harvey & Bice, 2014; Ite, 2004, 2005), or promoting expectations of welfare support (see, for example, Ellwood, 1989; Murray, 2006, 2008;
Torfing, 1999). The culture of dependency generated by solely charitable social
investment can be seen as creating unrealistic expectations among beneficiaries
(Idemudia & Ite, 2006; Ite, 2004, 2005). Philanthropy gradually shifts from gift to
duty. This is because continuous charitable actions may take the form of an implied
‘rent’. This implicit ‘rent’ is often assumed to be a form of exchange for the company
to continue to explore in the host territory—irrespective of the firm’s legal license to
operate (Idemudia & Ite, 2006; Ite, 2004, 2005).
In the history of O&G social investment in Nigeria, O&G companies, such as
Shell, began developing social investment on a charity basis, through a programme
called Community Assistance (Ite, 2004, 2005). This programme addressed areas
of water and sanitation, health care, voluntary training, education, agriculture,
micro-credit and business development and infrastructure (Ite, 2004, 2005). Ite’s
research shows how the Community Assistance initiative fostered a ‘culture of dependency’ and encouraged the local community to depend on O&G charity, rather than
empowering locals to overcome the poverty trap (Ite, 2004, 2005).
To fight this culture of dependency, Shell shifted its corporate-giving culture
towards a community-oriented approach. This approach prompted the local community to develop their own community development plan (Ite, 2004). Shell’s decision
created a catalyst for the community to shape social investment based on their realities
and needs.
Another view of charity as an obstacle to meaningful social investment is presented
by Le Billon (2001). In some countries, legislation exempts firms and individuals
from paying taxes if they are performing charitable actions. According to Le Billon
(2001), charity may insulate the host government from the tax revenue that would
otherwise benefit society. Host countries that rely on companies’ charitable actions
to provide the host society with social welfare tend to have high levels of corruption,
which means they are not likely to transfer the tax revenue to social programmes
(Ross, 1999, 2001).
It is important to note, however, that recent (albeit limited) studies have demonstrated that charity played a crucial role in promoting social development and
advancing democracy in the country. A study carried out by Anderson and Park
(2018) in Nicaragua demonstrated that charity to average Nicaraguans in the local
level gave mayors incentives to enforce local taxation and citizens to pay. This led
to higher national contributions to municipalities, which, according to Anderson
and Park (2018) impacted the country economically and politically. Another study
developed by Mulder and Joireman (2016) revealed that charity through ‘charity gift
cards’ instead of a ‘charitable gift in your name’ has allowed recipients to decide
35
Critics of Philanthropy have alleged that benevolent articulations of philanthropic
programmes are inherently patriarchal (Ellwood, 1989; Jessop, 2002; Murray, 2006,
2008). They argue that philanthropic programmes marginalise certain social groups
of society, fostering the dependency of underprivileged groups on welfare resources
(Ellwood, 1989; Jessop, 2002; Murray, 2006, 2008; Torfing, 1999). For example,
several companies have been criticised for taking a paternalistic approach towards
their host communities (Harvey & Bice, 2014; Ite, 2004, 2005), or promoting expectations of welfare support (see, for example, Ellwood, 1989; Murray, 2006, 2008;
Torfing, 1999). The culture of dependency generated by solely charitable social
investment can be seen as creating unrealistic expectations among beneficiaries
(Idemudia & Ite, 2006; Ite, 2004, 2005). Philanthropy gradually shifts from gift to
duty. This is because continuous charitable actions may take the form of an implied
‘rent’. This implicit ‘rent’ is often assumed to be a form of exchange for the company
to continue to explore in the host territory—irrespective of the firm’s legal license to
operate (Idemudia & Ite, 2006; Ite, 2004, 2005).
In the history of O&G social investment in Nigeria, O&G companies, such as
Shell, began developing social investment on a charity basis, through a programme
called Community Assistance (Ite, 2004, 2005). This programme addressed areas
of water and sanitation, health care, voluntary training, education, agriculture,
micro-credit and business development and infrastructure (Ite, 2004, 2005). Ite’s
research shows how the Community Assistance initiative fostered a ‘culture of dependency’ and encouraged the local community to depend on O&G charity, rather than
empowering locals to overcome the poverty trap (Ite, 2004, 2005).
To fight this culture of dependency, Shell shifted its corporate-giving culture
towards a community-oriented approach. This approach prompted the local community to develop their own community development plan (Ite, 2004). Shell’s decision
created a catalyst for the community to shape social investment based on their realities
and needs.
Another view of charity as an obstacle to meaningful social investment is presented
by Le Billon (2001). In some countries, legislation exempts firms and individuals
from paying taxes if they are performing charitable actions. According to Le Billon
(2001), charity may insulate the host government from the tax revenue that would
otherwise benefit society. Host countries that rely on companies’ charitable actions
to provide the host society with social welfare tend to have high levels of corruption,
which means they are not likely to transfer the tax revenue to social programmes
(Ross, 1999, 2001).
It is important to note, however, that recent (albeit limited) studies have demonstrated that charity played a crucial role in promoting social development and
advancing democracy in the country. A study carried out by Anderson and Park
(2018) in Nicaragua demonstrated that charity to average Nicaraguans in the local
level gave mayors incentives to enforce local taxation and citizens to pay. This led
to higher national contributions to municipalities, which, according to Anderson
and Park (2018) impacted the country economically and politically. Another study
developed by Mulder and Joireman (2016) revealed that charity through ‘charity gift
cards’ instead of a ‘charitable gift in your name’ has allowed recipients to decide