Oil Extraction and Poverty Reduction in the Niger Delta: A Critical Examination of Partnership Initiatives

Abstract

The combination of corporate-community conflicts and oil transnational corporations’ (TNCs) rhetoric about being socially responsible has meant that the issue of community development and poverty reduction have recently moved from the periphery to the heart of strategic business thinking within the Nigerian oil industry. As a result, oil TNCs have increasingly responded to this challenge by adopting partnership strategies as a means to contribute to poverty reductions in their host communities as well as secure their social licence to operate. This paper critically examines the strengths and weaknesses of the different community development partnership (CDPs) initiatives employed by Shell, Exxon Mobil and Total to contribute to poverty reduction within their host communities in the Niger Delta, Nigeria. Drawing on empirical data and critical analysis, the paper argues that while the CDP initiatives by SPDC, MPN and EPNL have the potential to contribute to community development, the failure to integrate negative injunction duties into existing partnerships means that the partnerships make no difference to how oil TNCs conduct their core business operation. Consequently, CDPs have had limited positive impact on poverty reduction in the Niger Delta. The paper concludes by examining the implications of the emerging issues for partnership and poverty reduction.