Bp in Azerbaijan: a test case of the potential and limits of the csr agenda?

Abstract

Azerbaijan displays some of the features of the phenomenon known as the ‘resource curse’: high revenues from extractive industries coupled with high levels of corruption, a weak system of tax collection, lack of development of other sectors of the economy apart from oil, and increasing social inequality. As the leading foreign investor in Azerbaijan and a company with a salient image on corporate social responsibility (csr), the question is what bp does to address this situation on its own behalf and that of its consortium partners. The article shows that Azerbaijan has taken a lead among ‘new’ petroleum states in promoting oil revenue transparency in recent years, not least as result of the prominent position of bp in the country, but that lack of transparency on the government's spending of oil revenues remains a major barrier to reliable oversight. As for community investments and regional development, bp operates programmes on behalf of its consortium partners that could provide models for extractive industries around the world. The article argues that, while bp has acted to establish collective goods in the csr realm for all foreign oil companies, it risks having all corporate efforts to promote social and economic development undermined by the host government's macroeconomic policies and lack of commitment to developing democratic and accountable political institutions.