Social License and CSR in Extractive Industries: A Failed Approach to Governance

AbstractWe examine the spread and persistence of corporate social responsibility (CSR) to mitigate oil conflict, despite its failures. Our work challenges the ideas versus interests debate, arguing for a third way in which reinforcing feedbacks between ideas (problem narratives) and interests (power disconnects) interact to shape the persistence of failed CSR. Using Ogoniland, Nigeria, as a case study, we present novel findings showing that Shell and the Nigerian government developed problem narratives for CSR that reinforces rather than narrows existing power disconnects. In contrast, as those most negatively affected by oil extraction, the Ogoni people have a more complex understanding of the problems associated with extraction and the necessary solutions. Therefore, they are disappointed with failed CSR applications practiced by Shell since 1997 and continue to protest ongoing impacts of oil extraction. Oil companies need to change their problem narratives and concede more power to communities, and governments should cease enabling failed CSR strategies. Additionally, governments should reflect on and address the role they play in enabling CSR as a failed strategy, whether they are oil-producing host countries such as Nigeria or oil-consuming home countries such as Holland. Last, we discuss the generalizability of our theoretical framework and propose that the international community could play a role in narrowing domestic power disconnects.