Oil Companies need to step up CSR efforts in interior –Vice President

Sep 23, 2019 News

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– Says Nappi Dam project by Cataleya Energy Limited a prime example to follow

By Kiana Wilburg

Industry stakeholders and governments across the world have placed great importance on ensuring all oil and gas companies engage in meaningful Corporate Social Responsibility (CSR).
The situation is no different in Guyana which is preparing for first oil in just a matter of months. Taking this into account, along with the fact that Indigenous Heritage Month is nearing its end, Fourth Vice President, Mr. Sydney Allicock is urging oil companies to step up their CSR efforts in supporting those who inhabit the interior region.
During an exclusive interview with Kaieteur News, the Minister intimated that the South Savannahs is one area that needs assistance in battling climate change.

The Vice President said, “In recent times, especially in the South Savannahs, we have been seeing the effects of drought. The water levels have dropped significantly in the wells…The situation is that the communities in these areas need support in combating climate change.”
Minister Allicock added, “I would want to state too that for the people in those areas, the two most important resources for them are not gold and diamonds, but clean air and water. Without that, nothing survives. So, the CSR efforts can go towards helping these communities preserve those two resources and I would suggest starting with help for capturing fresh water.”
The Vice President noted that there are two good examples of this in the Savannahs, with one in particular being the Nappi reservoir that was established back in 2017 by Cataleya Energy Limited. This company is a partner in the Kaieteur Block which is operated by ExxonMobil, in partnership with Ratio Guyana Limited and Hess Corporation.
Minister Allicock reminded that he was actually at the opening of that US$1.25million reservoir which has the capacity to hold 4.5 million cubic metres of water. He said that it was funded by Cataleya Energy to reduce the vulnerability to drought while building resilience in Nappi and the neighbouring communities. Minister Allicock was also in high praise of the project, since it is complementary to the Government’s Green State Development Strategy (GSDS).

“The Nappi reservoir captures rainwater during the rainy season and it was professionally done by Cataleya Energy. The engineering was of a high quality. Not only was it efficiently done but also it was designed by Guyanese engineers and it has shown tremendous progress and a natural bias towards local content and benefit. As of today, there is an abundance of fish life in there too which is supporting the sustenance of the neighbouring communities.”
He added that this is the type of meaningful CSR he wants to see the other oil companies get involved in. “This is what I am talking about; this is something that is needed in the interior region because more reservoirs would serve to help the indigenous people in dealing with the effects of climate change.”
CSR STRATEGY FOR OIL COMPANIES
The Inter-American Development Bank (IDB) is one agency that has constantly advocated for resource rich nations such as Guyana to ensure oil companies provide ample compensation in every sphere of their operation. It said that this is especially as it relates to Corporate Social Responsibility (CSR).
In a special report, the IDB noted that for CSRs to be relevant, they must address the most pertinent pillars of the economy. In this regard, the IDB argues that “building a town hall or health clinic in a mining community where the most apparent impact of the mining activity is large-scale environmental degradation or forced relocation of villages might be viewed as simply an attempt to buy off the community and create space to go on with business as usual.”
On this note, the IDB stressed that CSRs must be relevant to the needs of a country’s communities.
Further to this, the IDB argued that CSRs must be informed by the Hartwick rule.
That rule ensures that while oil companies are allowed to extract a country’s resource, meaningful investment must be aligned to the development of a country’s human and social development.
In this regard, the IDB notes that Christmas parties and hampers alongside Carnival programmes for children would not cut it. It said that CSRs, which do not seek to transform the country’s human capital only compromise the growth of the communities within the country.
The IDB said, “CSR initiatives have often been conceived by the ‘helpers’ in the air-conditioned offices of oil companies and consultancies rather than through ongoing participation with the beneficiaries; again, that approach follows the logic of CSR serving corporate objectives. Where oil companies have consulted local communities, the consultation exercises have usually been superficial and grossly inadequate.”
The IDB said, too, that if the governments are not skillful in developing a strong CSR strategy then, oil companies can end up aiming for “soft targets” that can be seen as a form of hush money and may even help to precipitate a type of dependency mentality in some host communities of the country. It said that this often takes the form of monetary donations to clubs, government entities, etc.
The Bank stressed, “Meaningful CSR must be in sync with the core developmental needs of the country from a Hartwick perspective. In this regard, Guyana must put in place an appropriate national CSR strategy to promote the avenues through which large firms, both national and multinational, are guided to link their CSR strategy with the pertinent Hartwick rule needs of communities.”
Minister Allicock told Kaieteur News that this is exactly what Cataleya Energy accomplished by constructing the Nappi Reservoir back in 2017. He wants other industry players to do the same.

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