Social and economic realities directly influence the business environment. In emerging economies like Nigeria, which are heavily dependent on revenue from oil and gas operations, industry attention to stakeholders and their quality of life is a business imperative. One best practice approach is to make strategic social investments that promote an enabling social and economic environment. By fostering a healthy exchange between business and its context, the needs of both human and business development are aligned and mutually reinforcing.
An example of best practice in strategic social investment is offered by the Community Development Programme launched in 1998 by the Shell Petroleum Development Company, Nigeria, Ltd. SPDC works in a region of over 1,500 communities and about 7 million people. In the past two years the Company has transformed a low-performing community assistance programme into a sustainable community development approach by combining strategies of participatory rural appraisal, local project planning, community ownership and management with capacity building and active partnering with local NGOs, government, and international organisations. The approach may be called the leveraged buy-in. Its objective is to transform the social investments the company already makes as an intrinsic part of doing business (taxes, products, jobs) or as direct "giving" (i.e. community support) into a sustainable and multiplying value that engages the resources, skills, and structures of multiple partners in government, civil society, and the development profession.
To deliver this programme SPDC organised a "community development business area" with over 120 staff supporting "best practice" community services in health, water and sanitation, education, business development, women's programmes, and agriculture. So far, Niger Delta men and women have created over 45 community development plans including over 30 different development "products", and have formed more than 150 project management committees. The approach grants communities the confidence and capacity to build their own sustainable future with reduced dependency on the Company. Useful lessons have emerged about how to expand corporate capacity to manage social investment and how to create new company structures and processes that bring positive benefits for communities and for business.
Today, the axiom "What is good for people is good for business" is often expressed inversely in the Niger Delta region of Nigeria. A caution raised by community leaders is this: "My poverty will make you poor". In a region of 7 million people and over 1,500 communities, low social investment by government and scant modern economic activity have created a paradox of poverty in the midst of plenty. These prevailing socio-economic conditions directly influence the success of business and ultimately the future of a nation heavily dependent on oil and gas. For this reason, sound business investment in the Delta, as in any emerging economic region, must consider achieving an enabling social and economic environment. This not only enhances business, but which gives a sense of business benefit to those people most directly affected by oil and gas exploration and production.
How can this ambition be realised? Meeting social and economic needs has traditionally been the role of governments and donors. Increasingly, however, business is being asked to play a contributing role. Kofi Anan addressed the World Economic Forum in 1997 with these words: In today's world, the private sector is the dominant engine of growth — the principal owner of value and managerial resources. If the private sector does not deliver economic growth and economic opportunity — equitably and sustainably — around the world, then peace will remain fragile, and social justice a distant dream. This is why I call today for a new partnership amongst governments, the private sector, and the international community.