Importance of context

This book focuses on the oil and gas sector and some of the lessons are specific to that sector. Above all, Chapter 6 shows that resource extraction creates particular economic, political and social problems. Many other economic sectors do not create such negative effects. Therefore, issues such as wider societal governance and revenue transparency may be less relevant to companies from other sectors. The nature of an industry determines CSR concerns, and any CSR guidelines, standards and assessments should be made with reference to the industry context.

By implication, the current focus on the establishment of universal CSR standards is problematic. Some universal standards such as the UN Global Compact may be too superficial for effective implementation. Other universal standards such as the reporting guidelines of the Global Reporting Initiative may be less appropriate than sector-specific standards such as the 2005 Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (see Chapter 4).

The wider societal context is also crucial. The discussion of transparency in Chapter 6 demonstrated that civil society, media freedom and timing are some of the necessary conditions of success for voluntary initiatives. The same initiative that was successful in Brazil or South Africa may not work in China or Azerbaijan because some of the conditions of success are absent. It has been previously shown, for instance, that independent monitoring of working conditions in China may be difficult or even dangerous (Chan 2005), while defective timing and sequencing was largely responsible for the limited success of the World Bank-led governance initiative in Chad (Gould and Winters 2007). Indeed, the uneven spread of the conditions of success across the world explains the uneven development of CSR in different parts of the world. Evidence in this book suggests that Brazil's Petrobras and South Africa's Sasol have much more sophisticated CSR policies than oil companies from other emerging markets such as China and Russia; indeed, CSR is generally more developed in Brazil and South Africa than in China and Russia.

Therefore, the universal assumptions about the social and political conditions of success for CSR initiatives are unrealistic. As the author of this book has previously argued, 'Current CSR models assume responsive business interested in CSR, an active civil society willing to partner with business and a strong state able to provide an enabling environment for CSR, yet these conditions are absent in the majority of the world' (Newell and Frynas 2007). A crucial challenge for the CSR agenda is to explore the potential and limitations of CSR in contexts which lack certain conditions of success. A related challenge is either to compensate for the lack of conditions for success in some countries (for instance, using alternative channels of communications in countries without free media or a civil society) or to help improve those conditions by contributing to better societal governance.

Finally, and perhaps most importantly, the needs and expectations of stakeholders vary between different places. As we pointed out earlier, South Africans expect companies to tackle black empowerment and HIV/Aids (Hamann et al. 2005), Argentinians expect companies to tackle the social needs created by the 2001 economic crisis (Newell and Muro 2006), while Nigerians expect oil companies to provide basic infrastructure (Frynas 2001). The universal CSR standards may do little to help companies 'to do the right thing' in those specific contexts.

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