Foreign oil firms are not often welcomed in parts of Nigeria. But for Statoil, wise community investment is paying off.
Norwegian state-owned utility Statoil set up the Akassa Community Development Project in Nigeria ten years ago, after deciding the Akassa people were those most likely to suffer if there was ever an oil spillage in the Niger Delta.
Today, with the help of non-governmental organisations Pro-Natura International (PNI) and Voluntary Service Overseas, the project provides a model for NGOs and oil and gas companies to follow worldwide.
Akassa is a fishing community in the Niger Delta with 30,000 inhabitants. Before the launch of the Akassa Development Foundation – set up by PNI in the belief that a group of stakeholders was needed to run and manage the community – the Akassa community had no proper sewage disposal, electricity or schools. In fact it was a community that had not felt the influence of local government since colonial times, and its people, as a result, were stuck in poverty.
Ongoing since 1997, the project’s biggest challenge was to overcome a culture of dependency, according to executive director Bill Knight. “We have had to re-engineer the project several times before we could achieve a measure of success because the people initially expected someone else to do the work for them,” Knight says. But by offering micro credit only if the interested party had a business plan, the Akassa Development Foundation has since transformed the local economy.
Statoil is unique in that it offers the foundation finance but otherwise maintains a discreet monitoring role. Statoil Nigeria’s public affairs manager Sophia Mbakwe says this is important because it gives the community a sense of ownership. She says: “We hope other oil firms can learn the importance of stakeholder dialogue. We’ve seen hospital projects abandoned because they weren’t built in consultation with the community. Conflict is also created if you help one area but ignore another that lies within walking distance.”
The foundation was put to the test recently when militant upstream activities caused two oil spills and refugees arrived in Akassa from warring communities nearby. Rather than take sides, the foundation and the Akassa National Council of Chiefs raised $5,000 from Statoil and $68,000 from the French government, which it then distributed to refugees from both sides of the conflict.
Knight is confident that memorandums of understanding – instances where an oil company such as Statoil has agreed to compensation and governance conditions in the areas in which it operates – combined with local demand for community development, have already inspired other oil companies to follow Statoil’s lead. He also predicts more support from donors should the government act on its consideration of a strategy similar to that of the Akassa Development Foundation, in support of the Niger Delta Development commission.
Statoil has expressed its intention to stop funding the foundation in 2011 when it hopes the Akassa people will be self-supporting. Knight predicts: “The goal is to form a community development foundation for every local government in the Niger Delta. Next stop will be across Nigeria, and if that works, the Gulf of Guinea and beyond.”
This article is reproduced with permission from the March edition of the London-based global business magazine Ethical Corporation. For a free trial to the magazine visit www.ethicalcorp.com/subs/trial/
