With the passing into law of the Nigerian Oil and Gas Industry Content Development Act (‘the Act’) in 2010, a needle's eye has now been transformed into a floodgate for the participation of local enterprises in the oil and gas industry in Nigeria. The oil majors, multinational corporations, which constitute the mainframe of private sector participation in the industry now have to deal with a whole host of new players within their supply chains, with serious implications for procurement management. One such implication will be challenges posed by sustainability risks (Olatoye 2011; Toye 2010).

Sustainability risks are those risks posed by aspects of an organisation's business or operational practices to its sustainability aspirations, expectations or obligations. Traditionally, sustainability risks in the supply chain have been focused on the environmental indicators – thus explaining lingoes like ‘green purchasing’, ‘eco-procurement’ etc (Russel 1998; Erdmenger 2003). However, the enactment of the Act also coincides with increasing emphasis on social as well as economic indicators of sustainability performance (Olatoye 2012).

This state of affairs raises issues on what both procurers and suppliers of services under the Nigerian content regime should envisage in the emergent industry structure. This is all the more so as the procurers of services are not just subject to Nigerian local laws but also a regime of international sustainability requirements, the so-called international corporate responsibility (Michael 2005).

Using the framework of the Global Reporting Initiative and associated standards and principles, this paper draws a chart of the dimensions of commitments which both the supply and demand sides of local content services must look at, as they cement their relationships. It concludes by demonstrating that Nigerian enterprises desirous of taking advantage of the Act will need to look beyond that Act and even the Nigerian legal regime for an understanding of the standard of practices which would be acceptable to their service procurers.

You can access this article if you purchase or spend a download.