Foundation for corporate social responsibility under the petroleum industry Act 2021

Corporate social responsibility

Abstract

The concept of corporate social responsibility (CSR) has garnered the interest of numerous
management and legal researchers over time. Unfortunately, there has not been any agreement
among academics about how CSR would affect corporate performances hence the relationship
between the two has proven contentious. Prior to the enactment of the PIA 2021, there was an
unending debate as to whether CSR should be made voluntary or mandatory. With the
emergence of the Petroleum Industry Act 2021, the issue has now been settled as corporate social
responsibility is now mandatory for every settlor. The authors therefore argued that corporate
social responsibility being a fundamental part of the oil and gas sector has been subjected to
diverse discussion, following the enactment of the Act. They maintained as a matter of fact, that
the Act contained various definitions without end, which for instance, provided in S. 240 of the
PIA as mandatory for every settlor to contribute 3% of her actual annual operating expenditure
of the preceding financial year in the upstream petroleum operations to the host communities for
the development of the host community, with sanction-provisions for noncompliance. The paper
therefore concluded that the PIA 2021 as good as it sounds, did not provide for other
communities that are not oil producing communities, directly affected by the activities of the
settlor, that is, gas flaring, but rather focused only on oil-producing companies that operated in
the upstream sector of the oil and gas industry within the host communities.