The Global Memorandum of Understanding (GMOU) process was initiated in 2005 by Chevron Nigeria Ltd. (CNL) as a significant departure from prior operating experience in the Niger Delta. Previously, the company’s community relations spend primarily targeted "host communities" and involved relatively large, signature projects like schools and hospital buildings. Serious conflict between "have" and "have-not" communities, and between communities and the company, had been escalating for years. The new approach, based on a community-driven development model, was intended to deliver equitable and sustainable social investments, build capacity in civil society and promote peace and security. This paper will describe the model, as well as programs for training and capacity-building, governance, planning and field research.

CNL’s model of community-driven development was based on earlier efforts by Great Britain’s Department for International Development (DfID) and the Ford Foundation. The GMOU effort represented the model’s first application in the international oil sector, as well as in Nigeria on a large scale.

By 2007, 72 projects had been implemented in 50 communities. By 2011, 200 projects were completed. The three-year GMOUs have been renewed twice and conflict around Chevron facilities has been considerably reduced. These results can be attributed to several factors: the community-driven development model, up-front investment in training and capacity-building, transparent engagement with government at all levels, and long-term commitment to the process by all major stakeholders. The results also indicate that, in extreme poverty areas, social investment may have a more lasting, measurable and direct impact on beneficiaries when funds are directed to projects that enjoy a high level of community "ownership," rather than to large-scale initiatives.

Community-driven development planning, coupled with transparent governance, can be used in other West African, Southeast Asian and Latin American locations where oil companies are considering social investments. It may be especially relevant in situations where traditional development approaches have failed and company operations are negatively impacted by local conflict.

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