Why is the Oil Industry and Corruption so closely linked - Research Paper Example

? Why is the Oil Industry and Corruption so closely linked? For many years now, Transnational Corporations (TNCs), the Multinational corporations and institutions which do work together with them have for many years been targeted for negative and anti- corporate campaigns mainly by the civil society actors which does includes the anti-corruption campaigners, anti-corporate campaigners, anti-globalist and anti-capitalists and academics in spite of their apparent contribution towards the development of the society. It has been alleged that these TNC and The MNC are always on the move to increase their market profits and to an exceptional gain competitive advantages, this they achieve by indulgence in unscrupulous activities like money laundering, corruption, bribery and many other malpractices showing little appreciation for social requisites and laws. These corporations have covered their community relations by hiding under the claims of being socially responsible and of the reputable ethical conduct, although the evidence in this paper proves the otherwise. The present decade is however no exception bearing in mind the tendency in the relationship in between these corporations and the civil society actors, the emergence of collaborative relationships, only benefit the business’s image than it does to the community society, it is however, unfortunate that even the media and the already published literature seldom examines greedy practices of corporations despite the fact that, the practices impact negatively on the stakeholders. This has resulted into several ethical questions on the real intentions and practices of the leaders in these corporations, the efficacy of their public association’s campaigns and the strategic location of the various civil society actors. This paper answers various arising questions by giving a thorough examination of the activities of an oil corporation, Shell, and looking into its relationship with communities in Niger Delta, Nigeria, it also looks into loop holes existing corporate anti corruption and acts, it goes ahead to show that companies really engaged in corruption and various malicious money laundering claiming that it is part of them being responsible social conduct. Purposely paying a close attention to Shell’s corporate social responsibility (CSR) initiatives which were aimed at developing the communities of Niger Delta. The case study is founded on both secondary and primary sources that included field observations and interviews with some key executive members of the corporation, local communities, government officials and some senior members of the oil companies in the Nigeria’s Niger Delta area. The paper argues that the corporations have made use of the political elite in the country to expand their global earnings and to gain competitive advantages by unscrupulous means such as bribery and other inducements to attain some government contracts in Niger Delta area, Nigeria. 1. Introduction A sector of business which makes firm claims to business ethics, Transparency, stakeholder’s rights, Employee rights, Corruption and human rights and codes of practice can safely be said to be the oil sector (Lawan 98). Oil Corporations are very dynamic and have leadership roles in coming up with allowable corporate practices and key acceptable codes of conduct in various places of work and involvement with various facets of the community. The involvement of Shell, in the famous Voluntary Principles on Security, United Nations’ Global Compact, and Human Rights, are just some instances. Its contribution towards the development programmers in construction, education, Transport and health, etc, cannot be underestimated. In spite of these contributions and achievements to the society, like many other corporations it has targeted of many negative or anti-corporate campaigns, such as corruption in the past few decades. Most civil society actors, including the anticorruption, anti-capitalists and anti-corporate campaigners, have more often been caught up in a lot of detrimental campaigns against the corporation’s leaders and politicians, employing various strategies like seizures, boycotts, publicity, networking, barricade and closures, amongst others in these campaigns. The campaigns mainly deals with some unethical issues such as corruption, and human right abuses. This paper mainly deals with the corruption as a malpractice, which has resulted into these unending campaigns. According to Asuni (75) corruption can be defined as the recurring mishandling of public office for personal financial gain, though, this is not fully so since corruption does exist in large and small private enterprises. Their gains do arise as a result of bribery, fraud, embezzlement, and conflicts of interest (Lawan 708). It is more often associated with the actions of dictator’s public officials, presidents and politicians. The paper has an appendix containing the interviews done in order to come up with the conclusion. Keywords; CSR, Corporate policy, Code of Conduct, Corporations, Corruption, Bribery. Methodology: Before, I move on, I need to provide the methodology and the literature review of the work, and it is to this that I now turn, I approached this project with somewhat of an opinion about the reasons for the connection due to dealings in the oil industry. My initial research phase was to line up interviews with key executives in the industry in order to get a firsthand account. This would give me insights on how the industry was created and its inner functioning’s directly dealing with the political aspect than the operational or technical aspect. Additionally, I began to gather as much evidence through scholarly reviews and articles as possible of direct engagement of the industry in the political theater both good and bad. The specific cases I have found and will address are that of Nigeria and India, including smaller incidents from around the world. This would give a good picture of while geographically theses areas may be different the connection of corruption to the industry is prevalent no matter. Throughout evidence will be provided to just how closely both corruption and the oil industry are closely interlinked together with each case giving a picture to create an answer as to why they are so closely interlinked. Literature Review: As for the literature there are several articles that I have used to create and support my arguments, one of these being a scholarly article written by Dr. Enweremadu from the university of Ibadan. In this study Dr. Enweremadu indicates that the source of violence and rampant corruption throughout the Niger Delta has been due to the oil wealth of the region and the companies/parties profiting from those reserves. He presented that since all three federal, state and local governments received 90% of their funding from oil revenues it created an unreasonable dependency upon the industry to function. It further compounded the issue of corruption as individuals sought out oil rents aggressively in the region. This case proves to have substantial evidence as the research was conducted first hand within the region and has various interviews of individuals both in the industry and affected by it. He stresses that one of the crucial reasons for persistent corruption in the region is the extreme lack of oversight on how funds for the government from oil revenues are being spent, with budgets and entire sums of money often simply disappearing. The second scholarly paper that has proved to be highly substantial is written by Rabah Arezki and Marcus Bruckner, they address the corruption and state instability caused by oil rents. They argue that since the elite enjoy massive amounts of oil rents, it would personally not benefit them to create additional transparency and fairness, that they would personally face a loss. Essentially they have a strong personal incentive to reduce political cleanliness and rights to avoid the loss of those high rents. Analysis of Case Study: After having reviewed the interviews in details and analyzing not only the responses but the similarity in responses to some of my queries I found that while the level of rents and circumstances of each region are different, the outcomes seem to be almost identical to the wrong that happens when oil is present in a region. To fully explain why corruption and the oil industry are fully linked I will use those interviews and the evidence presented by the articles and scholarly sources to frame my argument. I have found that the level of high rents and geography played the main roles in corruption being allowed to plague the regions. Nigeria like many other oil rich countries is a third world country, lacking the social and political development of developed nations. For each region addressed and studied lacked social development and politics was not clean to begin with, the oil industry while it did develop the industrial aspect of many nations only further obscured the political situation and enhanced corruption. Nigeria is a country in which oil wealth has been exploited for many years; there is no doubt that it has put the country on the world stage as an oil rich region, but at the price of the country itself. The articles and studies prove exactly this, the locals have been subject to horrible atrocities and corruption has continued to rise and plague the country. Additionally, the interviews provide a viewpoint that is direct towards to creation and operation of oil within a country. All three executives have been with company A since the beginning; giving me an in detail chronology of how the business was set up through illicit activities, in order to obtain licenses and beat competitors out. They also provided methods and current operations that continue with illicit dealings, whilst not naming any individuals they did address specific cases and the activity that occurred. For India, it will be important to explain the socio economic situation as well as the political as corruption was rampant regardless of oil manufacturing. In order, to show why the oil industry is so closely connected to corruption I will also use evidence by dirtymoney.com, they provide figures that show the clout of the oil companies in developed nations like the United States. The paper will address both developed and third world countries to show a clear connection that oil and corruption go hand in hand whether socio economic development has happened or not. Through this I will be able to offer my explanation of why they are so interlinked. Conclusion: After studying the interviews and analyzing the various studies and data, the obvious conclusion is that the reason corruption flourishes wherever the oil industry does is because of the amount of politics involved. In order to conduct oil operations companies require countless permits and oversight, all aspects that deal with and are governed by political officials. The need for industry executives and politicians to work together is so strong that it allows for under the table deals to occur to increase and sustain oil rents that are unjust. Furthermore, the lack of oversight into the industry and expenditures is an issue that must be solved through tighter regulation and oversight. In my conclusion, I provide a possible aid to help curb corruption; the idea revolves around an entity to govern without any form of interest. I find that the only way to eradicate the rampant corruption is to have impartial and regulators without any vested interest to govern the industry and the politics behind it. If there is nothing to gain for regulators by favoring any individual the chances of a fair and clean system running become much more likely. In order for this to happen, developing nations must also provide support and tight oversight upon companies and their operations in foreign countries, something that is happening too slowly at the current time. The entire universe did witness an enormous campaign by the various civil society actors against the business and sustaining institutions of fiscal globalization like International Monetary Fund (IMF), and the World Bank, in conjunction to the oil giants such as Shell. Way from Seattle in the year 1999, Genoa in 2001, Quebec in 2001, Switzerland in the year 2003, Washington, and to Gleneagles 2005, the civil society actors did shook the entire business world with their massive campaigns that more often than not disrupted business activities, damaging the reputation of their business. These civil society actors included the , Christian Aid, Friends of the Earth, Greenpeace, and Human Rights Watch. Table 1 indicates some clear instances where the campaigns particularly directed towards the oil corporations. It is relevant to bear in mind that at this particular juncture most civil society actors does perceive these corporations more as “enemies” (Haerens 612) and finds it impossible to associate with them. The above hatred is based merely on moral grounds, attention being founded on both the supply and demand, and much of the modification is intended at subduing the supremacy of public leader, with the international monetary fund saying that the effect of market forces are cable of help to fight corrupt malpractices since it always evaluates business performance and managerial performance in addition to reducing administrative problems and bottlenecks found in the public sector and thus limiting the capacity of public officials to pull out surplus financially viable rents, presupposing that dishonest practices do not thrive in the financial market economies. While In contrast, some authors have documented the responsibility of the private sectors in elevating corrupt practices via a multiplicity of business vehicles. Table 1: Instances of major protests by civil society organizations against oil TNCs Place Oil TNC Issues Involved Turkey and Georgia BP Environmental concerns over the Baku- Tbisili-Ceyhan pipeline UK and USA ExxonMobil Climate change Burma Unocol and Chevron Human rights abuses Colombia Occidental Violation of ancestral land of the U’wa people Ireland, England, Scotland, Swede Shell Rossport gas pipeline Chad and Cameroun Shell and Chevron West africas gas pipeline porojects and community rights Turkey Shell, Mobil and BP Workers’ rights The North Sea Shell disposal of Brent Spar oil rig The Netherlands Shell Gas flaring in Nigeria Nigeria Shell Ogoni, and environmental issues in the Niger Delta area Burma Total Human right abuses France Total The Erika shipwreck off the coast of Brittany Though there exist a considerable research on a figure of aspects such as accountability, future capitalism, governance, and ethics , broader does accounts of the corporation’s claims of social responsibility and their malpractice of dishing out bribes and getting involved in many other corrupt, practices such as impediments for substantial development in countries developing are very scarce. While corruption can closely be linked with oil discover, the interview results proves otherwise, in countries like India according to, the interviewee Mr. A, real name withheld, Senior level executive, (from the interview in the appendix) one has to look at a bigger picture when discussing this act, he says that, corruption in India evolved even before the coming of oil industry in that country, this is partially due to the fact that, in that country virtually everything you have to pay for, from minor things to even greater ones, he puts it that: “Well you have to look at the bigger picture. Corruption in some countries was highly prevalent before the industry came into the fold. India is one of these countries, everyday there are multiple scandals exposed about bribery and corruption. For India specifically the unfortunate situation is that this is the way business works here, you want permits you have to pay, you want to run a business you have to pay, you want to make a profit you have to pay, the bottom line is you have to pay to work here. With that being said I think the sad reality for India is that corruption has become ingrained into the culture and infiltrated every single level of the country. Until this country does not have an uprising or a revolution things will be just be as bad if not worse.” The paper gives an examination of the anti-corruption policies of some corporations such as Shell, in Niger Delta under inquiry and therefore extends likelihood of research into the CSR claims of financial crimes and corporations. In specific, it supports reflections on major questionable malpractices of Shell that increase profits, but hurt the community around. Such actions are situated within the larger dynamics of commercial society in which corporations make use of an assortment of schemes that does includes corruption in order to increase proceeds and proffer higher rewards for their executives. 2. Multinationals, TNCs and the Claim of Socially Responsible In the modern market society, the oil corporations, such as the Transnational companies and multinational companies, can safely be said to be the motor of capitalism. Although, initiated by via the law and many societal contracts, most of the do not owe loyalty to any mother nation, nor locality (Okonta 27). It has always been stated that governments and maybe host society are concerned in doing away with poverty, health care and human rights, this corporations though, may not share these objectives. They are basically ‘private’ organization and are obligatory by stated law to put on the front line the welfare of its shareholders more that other stakeholders (Okonta 21). Firms nowadays are projected to perform their operations conscientiously with accountability to large society. To make legitimate their social power corporations may concede some social tasks, but they are not able to buck the total prerequisite to boost profits and dividends to the profit of capital. As Okonta (24) puts it: ‘A corporation may only do good only to aid itself do well, a thoughtful limit on just how much good it can. The compassionate rhetoric and actions of socially answerable corporations generate an attractive corporate figure, and able to do some good to the world. They however, do not alter the company’s fundamental institutional nature: its unblinking commitment to its own self- interest’ (p. 50.). The application of inducement and bribery in securing most of the competitive advantages is chiefly, an issue with the executive discretion other than any moral compulsion. In fact it has been stated that this authority might be used to the benefits of the directors alone as their salaries get dictated by the level of returns and profits invested capital. The markets thus put forth force on firms to generate an ever escalating return and profits since capitalism do not offer any direction to higher limits of accruals (Okonta 91). Firm are in a position produce supplementary proceeds for finance investment, not only via competitive advantages on the respective firm’s services and products, but also via bribery and many other forms of inducements in an attempt to secure governmental contracts. So in their quest to achieve the corporate goal, other people are put at risk. These corporations like Shell in Niger are in Nigeria, do try to control virtually everything, from general public opinion to major government decisions, they are usually ostentatious, maintaining that “we’re the best’. This absence of empathy and social tendencies are also key individuality of this corporation (Okonta 61). Business conduct includes the codes such as statements w rejecting the payment or acceptance illicit bribes, either directly or indirectly via third parties such as the private individuals or public officers. Hitherto, their participation in this malpractice in conjunction to other anti-social practices may not thus be reconciled with the business codes of conduct stipulated (Morocco-Clarke 10). Morocco-Clarke and Susan (87) stated clearly that, though it may acclaim the slick CSR reports as substantiation of communal responsiveness to communal pressure, much of this receptiveness get linked primarily to the capacity to attain profits. Malpractices like that appear to be part and parcel of a ‘firm’s culture’ which persuades many people into believing that ‘twisting the overall rules’ for individual gain is a symbol of business insight (Morocco-Clarke, 2012). Through the plea to business codes of principles and claims of helping the public attention the corporation might defuse critics nevertheless policy is not by ease translated into proceedings. As Haerens, (20) notes: ‘Shell relates to others apparently, ‘its entire goal is to put themselves in public in a way alluring to the public, nevertheless, although it might present itself as empathetic and apprehensive about others, it lacks the capacity to care for anyone a part from themselves’. (p. 57.) Corrupt practices can generally be said to be pursued away from the glare of community’s scrutiny and the firm’s financial reports are more often than not silent on these issues. These malpractices are frequently camouflaged in the financial report as some of the justifiable expenses. In fact in most cases, western companies and various agents are usually guilty of paying or offering bribes to the Nigerian government officials in order to secure the highly expensive government tenders in addition to other benefits that comes along with it (Onwudiwe, Ruby, 11). 2.1 How Transnational Corporations gets involved According to the interview results done to the managers and some senior persons in the oil corporation, most of them get entangled into these act in their quest to attain licenses, permits; favorable policies, so in order to acquire these, fees has to be paid, to the responsible government officials and since this highly involves the government; hence, the interaction level between people in the industry and politics is quite high creating an environment conducive for corruption. Mr. B who is the Manager exclaims that: “Failure to capitalize on the act, or corporate with the relevant officials, their opponents would do the same, so to keep alive in the business, you had to do the best to do away with the competitor and consequently, they consistently received not only the largest reserves but those that required the least investment before being fully operational as well. (from the interview) According to Shaxson, Nicholas (877), ‘in many cases western companies and western people, or agents for that matter have been responsible of offering bribes to various government officials in Niger in an attempt to secure contracts, lucrative licenses, permits, in addition to other advantages which comes along with the contract. Transparency International states that bribe money more often stems from corporation based in the world’s richest countries. Let’s have a look to how shell in itself has been involved in this malpractice under the cover of carrying out its corporate social responsibility. 2.1.1 Shell and CSR in Nigeria As a fresh oil fever collects pace in West African countries such as Nigeria the lesson learnt from history says that in any place with oil, corruption will immediately follow, it is therefore by no coincidence that, the discovery of oil in Nigeria quickly was followed by corruption. History holds true therefore that, where oil is found corruption will follow. In this particular case, how did corruption got linked with the discovery of oil in Niger Delta, Nigeria and Shell, well, the below paragraphs looks into it extensively. In addition, The Transparency International index published in 2010 on Corruptions Perceptions openly highlights this connection: Nigeria, which is one of the world’s largest producers and amongst the largest exporter of oil, is positioned 134 out of 178 countries for its prominence in corruption. The previous month’s reports revealed the degree of harm wrought to the Niger Delta area, Nigeria by the over 50 years of oil mining by Shell. Succession of governments efficiently depended on the corporation’s to monitor itself and do away with the spills. About 80 per cent of the country’s revenue is derived from the gas and oil, that has earned Africa’s biggest oil producer an more than $600 billion ever since the company was started in the year 1960s. Sadly enough, at least 69 per cent of its citizens live below the povertyline (Mauro 65). In the year 2009, the corporation parted with ?9.6m while settling a legal action that had accused it of its involvement in the putting to death nine Ogoni tribal leaders in 1995, who were playwright Ken, Saro-Wiwa, why they who were campaigning against the destruction of the environment. This reveals a clear connection between corruption and oil discover since this settlement meant that shell did not have to be held accountable for the charges of colluding with the military despotism of the age to compress the protests and had the entire army units to pay (Ikelegbe 43). In fact a confidential cable published in 2009 by Wikileaks, realize that Shell was priding itself that it had the corporations spies in virtually all the pertinent ministries of the Nigerian government. According to Mr. A , real name withheld, Senior level executive from the interview (Find the interview in the appendix) oil business requires permits and oversight, attaining these permits and oversight involves paying fees, which are surrendered to the key government officials, without involving the minor citizens; asked why corruption is linked so much to oil specifically, he says that; “Well each business has its different requirements to be a professional in, for oil specifically, we require permits and oversight. This highly involves the government; hence, the interaction level between people in the industry and politics is quite high which creates an environment that can be conducive for corruption.” One key weakness that elevates act is the absences of a proper law governing these companies. Some of the companies even give wrong finance statements to the government who unfortunately fail to follow up the credibility of the data given to them, this is due to the fact that, the companies join up with some unscrupulous key government officials, politicians who waiver for them some fees or taxes, by paying the officials smaller money, lower than the amount required by the law (Mauro 45). One main reason that elevates is this act is the fear of the companies that their competitors might take advantage to their advantage, according to Mr. B – Manager, name withheld, at the beginning they conducted meetings or dealings of some illicit nature, either to stop the competitors or to receive the permits which were rightfully due to them. He goes ahead to confess that they had strong government contracts that would force things into their favor, he gives an example that; (from the interview in the appendix) “Many years ago there was the allocation of gas blocks to be done by officials, we consistently received not only the largest reserves but those that required the least investment before being fully operational as well. While I cannot say whom or what, it is quite known that we can flex our muscles enough to get what we want now. That is the unfortunate nature of where we are conducting business. If we didn’t do it to capitalize on our ideas, someone else would have and you would be interviewing them today not me. (from the interview) He regrets the acts, but says that, unfortunately, they could not do otherwise, in which case their competitor could have taken that to their advantage and since everyone wants the best for him or herself they had to, for them to succeed. Apart from causing severe environment degradation, further evidence of these intentional effects of CSR has been illustrated by the social impacts on the local communities. Nembe’s case ends up being significant yet again. Its relationship with the community through its various operations and development programmes have ended in many unprecedented commercialized wrangles where most individuals and various groups are tirelessly combating over the benefits or patronage from Shell; community funds for development are mismanaged, misappropriated, and embezzled by the respective political and community leaders or even get shared amongst some society’s select few or a group leaving out the rest of the society (Mauro 65). It is very sad though that, the company, does all it takes to protect the identities of its subsidies and equity stakeholders. This creates a vacuum through which the corrupt leaders to conceal the stolen funds unseen. it is also alleged that the Shell’s officials does gives inadequate financial statements which not only disguises the leaders corrupt deals, but also makes it virtually not possible for any of individual to keep a close look at them (Ikelegbe, 98). Another thing according to Adejumobi (29), Shell does not publish information from country to country, allowing them to keep under cover the fees, taxes and royalties they pay to the local Nigerian government. Nevertheless in the absence of this valuable information, one may not be able to hold the government officials, political figures, or even the Executives of the company account for the proceeds they receive (Peel 76). According to Corcoran, (26), looted oil and gas income from Shell, only benefits very few, but has terrible consequences everyone else, it has not only fueled conflicts over the available but have also trapped people in an absolute poverty, something that could have otherwise been avoided. Despite this mischief, the firm has a way in which it cover up for this financial turbulence and fear to their status simply by revealing, documents of corporate social responsibility statements, alongside, codes of conduct which guarantee moral behavior, enhancement of financial and societal infrastructure in conjunction to better life all its stakeholders (Adejumobi 761). From the interview (23) noted that: ‘The firm has outlined the policies, strategies, and management systems in place to help combat corruption and bribery. Nonetheless, CSR and the corporate governance, which includes initiates and measures to fight corruption in business, have progressed typically in parallel’. This thus indicates clearly the loop hole existing in between the company’s cunningly crafted the do good image and the real operations and recommends, at a least amount, that skepticism regarding CSR is well warranted (Peel 810). It can safely be said that Corruption has ingrained poverty and hunger in Niger area. It has been a serious obstruction for communal development in Nigeria since it has devastating impacts in depriving them of funds. By leaving the country, Nigeria, to the Western countries has hindered the country from making its investments in both the economic and social spheres of developments (Corcoran 96). In addition, Corruption does barricade developments, consequently harming the poor, and as a result impeding business growth in the Niger area, (Corcoran 86). In fact, it can be said that, corruption is the biggest hurdle to investment, this is because most of the proceeds earned in the Niger Area, instead of helping the locals; the political leaders collude with the westerners, the proceeds ends up banked overseas (Sinclair 88). This malpractice has also reduced tax proceeds by almost 50 per cent thus plummeting the funds obtainable to governments for its public spending; this has led to rapid unemployment, poor infrastructure, low quality education and poor health units in most parts of the country. As a result, it lowers the worthiness of most public services such as infrastructure, customer revenues, distorts government spending decisions, ruins the confidence in the rule of law and decreases tax (Sinclair 293). Shell is are far being transparent when considering the payments they make to Nigeria, leaving it all open for the corruption, thereby hampering cordial efforts to do away with poverty. This tragic paradox, calming that most countries rich in resources like Nigeria remains poor, emerges from the mere fact that there is lack of data on the gas and oil proceeds and how they get managed (Sinclair 45). Intensive Analysis has show that, should more income be spend on education, which will see to it an enhanced human capital development, that is vital to poverty abolition via good leadership. Nonetheless corruption, take for instance, has robbed Nigeria, especially Niger area, its political legitimacy (History Behind the Headlines, 213). The transfer of illicit funds and corruption have not only led to the capital flight in Nigeria, with at least $500 billion stolen but have also been stashed away by Shell into the foreign countries. Out of the whole amount, only a mere $50 million is estimated to have been recovered (O'Meara et al. 23). Studies have shown clearly the role played by Shell in the economic and socio-political development of Nigeria (Walker 5). There exists a misgiving that a very large volume of Shell’s CRS reports are just but self serving and are only principally linked to the capability of Shell to make supernormal profits (Tipchanta 22). Shell’s behavior shows clearly that it doesn’t actually worry itself with its victims, and the corporation often rejects to agree to be responsible for their malicious actions and more often than not, do not feel remorse. Tipchanta (212) did note that even if Shell got arrested, going contrary to the law, it paid very big fines but continued performing the bad it used to do before, anyway. In fact, in most instances, the penalties and the fines paid by Shell are trivial as compared to what it takes in as the profit. 4.0 Attempts to combat the illicit act. Corruption can safely be marked as a global phenomenon that requires both the global and local intrusion. Most of the international initiatives got established in an attempt to criminalize the bribery of most of the public figures to deal with the supply side of corruption and to make available communal legal aid, as contrasting to the actual practices of the corporation globally and majorly in Nigeria. This section thus examines the anti-corruption law both regionally and globally, and majorly in Nigeria (Arezki, Rabah, and Markus Bruckner 65). The laws intended to discourage corruption and bribery that is injurious to growth and a basis of criminal actions get addressed to some degree in UK by the year 1907 and 1915 avoidance of Corruption Activities, and the famous Public Bodies Corrupt Act of 1990 (Walker, 2005). It has been shown that even when taking all these into considerations they are supposed to be out of date, uncertain and without scope and they are appropriate only for corporations that are subject to UK laws and unincorporated institutions and abroad branches are excluded, Le, Billon (2005) noted that the harsh criticisms for malfunction to obey adequately with the requirements under the so called OECD (Convention on Combating Bribery of Foreign Public Officials) in cross-border commercial and linked actions and its management of the BAE System landed into the passage of the Bribery Act 2010. Famously known as, the British Act 2010, aimed at consolidating the common and statutory law offence of bribery. Ever since 1994, during the time that 26 OECD countries at first sweared to take tangible and significant steps to curb this act of bribery of foreign public officials, more than a few other international organizations which included the European Union, Council of Europe, and the Organization of the American States, in addition to huge money lending institutions like the World Bank, have as well keyed to this worldwide drive to do away with corruption and bribery across economies (O'Meara, 53). In conjunction, United Nations in 2005 introduced the first international instrument that try to control corruption in one of a major complex legal act, known as United Nations Convention Against Corruption (UNCAC). It has also had manifestation of international agreement on what the states should do to put off and criminalize corruption, and to get better international collaboration in combating corruption and recovering assets globally. The convention highlights the significance of distributing responsibility among states for the occurrence of trans-boarder corruption crimes. The main landmark by the UNCAC has been the benefit recuperation, that comprise of evaluate for straight recovery of possessions, global cooperation for the rationale of confiscation, and disposal of assets (ENWEREMADU, 76). Solution We ought to see to it that oil and gas companies such as Shell go further to put off corruption. Shell in specific needs to avail a detailed financial reporting, particularly at the country level. It is after that that the government can track funds and clutch governments to account for revenues and the fees (ENWEREMADU 65). In fact Shell ought to make public, the details of its subsidiaries and various sites where it works, this will not only enable detailed monitoring but will also encourage accountability. In addition, Shell needs to tell the people of Nembe, of Niger Delta area, the policies and the strategies that they have so far put in place to do away with this illicit, upon which the people should evaluate and see it the strategies are really appropriate enough (Black 96). Nigerian Government ought to be fully open. Its responsible ministry should publish the royalties and income. They also have to see to it that shell meets international accounting standards globally accepted and publish autonomously audited accounts. Since shell is based in Nigeria, and many other developing countries. Nigeria and the other countries must see to it that they penalize corrupt doings by shell abroad. It can safely do this by demanding that Shell gives to the people a detailed report of its operations. In fact the government should take stun actions on Shell’s malicious activities such as sponsoring some jobless youths in the community, purchasing for them ammunition and arms in order to fight severely whoever is fighting them or claiming or protesting for their right from the firm (Blackc766). This is how the Indigenes of Nembe summarize Shell’s social and economic impacts thus, “Shell has forced a knife in within our midst and now we have simply fallen apart. Our political selfishness, corruption and the love for money have only set us against one another, we no longer consider ourselves as sisters, brothers, mothers, fathers, and chiefs, we disrespect ourselves for transitory and earthly things, that have culminated into the development of clandestine and nocturnal that have simply transformed Nembe area to now Sicily (a place in Italy known for similar wars). Youths who are sponsored by our politicians, elders, government agents, chiefs, and Shell itself have managed to cause our aging parents and younger children, as our youthful men pass on prematurely in the arms struggle, our dear parents fallow the suit and die of heart attacks, the sad part is that our the children are also deprived of the valuable knowledge by preventing them from attending schools due to the unending wars (Haerens 654). Conclusion Though this paper has focused majorly, on the Cooperate Social Responsibility programmes of Shell and how Shell used its CSR reports to conceal it malpractices to rake in supernormal profit in the Niger Delta area of Nigeria. It should be made clear that it is not the only oil Multinational Corporation or Transnational Corporation for that matter in the Niger Delta, Nigeria. Other Transnational Corporation that also conduct their business in the Niger Delta does includes the Addax, Exxon-Mobil , TOTAL-FINAELF, ENI, ChevronTexaco, ConocoPhillips and Addax amongst others. The story of Shell and its severe effects on the local communities are very parallel for almost all the oil Transnational Corporations or Oil Multinational Corporation. But in this sense, Shell has been used as a broad case for the oil corporations in Niger Delta area, Nigeria (Taylor 45). The next thing is that, Nembe’s gives a clear illustration of the things taking place in several other societies of the Niger Delta area in which the oil TNCs or the MNCs have their operations. The role played by Shell in promoting malpractices such as corruption, social damage and financial distress to the majority of the members of the community can be washed away easily. Reference Lawan, Mamman A. The Paradox of Underdevelopment Amidst Oil in Nigeria: A Socio-Legal Explanation. University of Warwick, 2008. Internet resource. Asuni, Judith B. Blood Oil in the Niger Delta. Washington, D.C: U.S. Institute of Peace, 2009. Internet resource. Black, Edwin. Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives. New York: St. Martin's Press, 2006. Print. Sinclair, Upton, and Grover Gardner. Oil!S.l.: Blackstone Audio, Inc, 2008. Sound recording. Okonta, Ike, and Oronto Douglas. Where Vultures Feast: Shell, Human Rights, and Oil in the Niger Delta. San Francisco: Sierra Club Books, 2001. Print. Forrest, Tom. Politics and Economic Development in Nigeria. Boulder, Colo: Westview Press, 2013. Print. Peel, Michael. A Swamp Full of Dollars: Pipelines and Paramilitaries at Nigeria's Oil Frontier. Chicago, Ill: Lawrence Hill Books, 2010. Internet resource. Corcoran, Mark. Nigeria's Oil War. New York, NY: Filmakers Library, 2006. Internet resource. Adejumobi, Said. State, Economy, and Society in Post-Military Nigeria. New York: Palgrave Macmillan, 2011. Print. History Behind the Headlines: The Origins of Conflicts Worldwide. Detroit: Gale Group, 2013. Print. O'Meara, Meghan A, Nancy Matuszak, and Sonia Benson. History Behind the Headlines: The Origins of Conflicts Worldwide. Detroit: Gale Group, 2013. Internet resource. Haerens, Margaret. Nigeria. Detroit, MI: Greenhaven Press, 2013. Print. Walker, Ida. Nigeria. Philadelphia: Mason Crest Publishers, 2005. Print. Onwudiwe, Ruby. Globalization, Extractive Fdi and the Effects of Multinational Corporations on Conflict Situations in Developing Countries. , 2011. Print. Le, Billon. The Geopolitics of Resource Wars: Resource Dependence, Governance and Violence. Taylor & Francis, 2004. Internet resource. Morocco-Clarke, Susan A. Improving Environmental Protection Within the Nigerian Oil and Gas Industry: Long Term National Solutions, Short Term International Solutions?, 2012. Internet resource. Tipchanta, Deekana. The Scramble for Africa's Oil: A Blessing or a Curse for African States?, 2012. Internet resource. "Top Stories." Oil & Gas Journal- Oil and Gas News, Prices, Oil Drilling, Exploration and Production. N.p., n.d. Web. 01 Oct. 2013. "Peer-reviewed Articles." : Oil in the Ocean. N.p., n.d. Web. 01 Oct. 2013. "Corruption Risk in the Oil and Gas Industry." Corruption Risk in the Oil and Gas Industry. N.p., n.d. Web. 01 Oct. 2013. "Oil Industry Continues Fight Over Extractive Rule." Corruption Currents RSS. N.p., n.d. Web. 01 Oct. 2013. "Join Academia.edu & Share Your Research with the World." Denying Oil Exploitation and Corruption in the Niger Delta. N.p., n.d. Web. 01 Oct. 2013. "Journal of International Affairs." Is Russia Cursed by Oil? N.p., n.d. Web. 01 Oct. 2013. "Economic Issues No. 6 -- Why Worry About Corruption?" Economic Issues No. 6 -- Why Worry About Corruption? N.p., n.d. Web. 01 Oct. 2013. "Arctic Special How Oil and Corruption Have Become so Closely Linked." The Ecologist. N.p., n.d. Web. 15 Oct. 2013. "Big Oil Loses SEC Vote on Foreign Disclosures." Houston Chronicle. N.p., n.d. Web. 29 Oct. 2013. "Nigeria's Oil Disasters Are Met by Silence." The Guardian. N.p., n.d. Web. 30 Oct. 2013. . ENWEREMADU, DAVID U. "Ending the Vicious Circle: Oil, Corruption, and Violent Conflict in the Niger Delta." (2009). Ikelegbe, Augustine. "The economy of conflict in the oil rich Niger Delta region of Nigeria." Nordic Journal of African Studies 14.2 (2005). Print. Shaxson, Nicholas. "Oil, corruption and the resource curse." International Affairs 83.6 (2007). Print. Ross, Michael. "Nigeria’s oil sector and the poor." Position Paper for DFID-Nigeria, UCLA, Los Angeles (2003). Print. Ades, Alberto, and Rafael Di Tella. "Rents, competition, and corruption." The american economic review 89.4 (1999). Print. Taylor, Ian. "China's oil diplomacy in Africa." International affairs 82.5 (2006). Print. Arezki, Rabah, and Markus Bruckner. "Oil rents, corruption, and state stability: Evidence from panel data regressions." European Economic Review 55.7 (2011). Print. Mauro, Paolo. "Corruption and the composition of government expenditure." Journal of Public economics 69.2 (1998). Print. Appendix Interviews All two key executives have opted to remain anonymous and not use the company name at all the interview is as follows, hence, I have created names for the executives and an acronym for the company which is not its ticker name. Please use for as support for the connection between the oil industry and corruption as India is central to the argument and a great example. Key: Company Name: LEO Exec names: Mr. A Mr. B Mr. A- Senior level exec: How did you get involved in this business? “ Our owner and I go way back, we came up with the idea that has created this juggernaut of a business today.” Why Oil? “Oil in today’s world is the blood that flows through the veins of an economy, each country whether developed or developing has sought oil to power its industries and machines. Yes, we are today trying to stop using fossil fuels but we are still long ways away from this. Oil allows us a sort of cash cow if you will, it’s an ATM that is not only powering most of our projects but our levels of revenue have never been stronger.” Is the industry clean? “If by clean do you mean by the book, no. No industry is completely clean. Does the oil industry involve higher scrutiny, of course it does. I believe any industry that is highly involved with permits; environment or high profits will be highly scrutinized. And the oil industry involves all three.” Why is corruption so closely linked to business? “Well you have to look at the bigger picture. Corruption in some countries was highly prevalent before the industry came into the fold. India is one of these countries, everyday there are multiple scandals exposed about bribery and corruption. For India specifically the unfortunate situation is that this is the way business works here, you want permits you have to pay, you want to run a business you have to pay, you want to make a profit you have to pay, the bottom line is you have to pay to work here. With that being said I think the sad reality for India is that corruption has become ingrained into the culture and infiltrated every single level of the country. Until this country does not have an uprising or a revolution things will be just be as bad if not worse.” Can you give me a specific example? “No comment” Why is corruption linked so much to oil specifically? “Well each business has its different requirements to be a professional in, for oil specifically, we require permits and oversight. This highly involves the government; hence, the interaction level between people in the industry and politics is quite high which creates an environment that can be conducive for corruption.” Can you share anything more specific with me? “ I am sorry but I simply cannot, that is all the time I have I hope this will help you in your paper.” Mr. B – Manager: How was the business set-up? “Well being with the group from the beginning stages it gives me a unique perspective to think about how small we were as a business compared to now. At the start we had to often conduct meetings or dealings of a certain illicit nature, either to receive permits that were rightfully due to us or to stop a competitor. We had strong governmental contacts that worked to push things in our favor. For example, many years ago there was the allocation of gas blocks to be done by officials, we consistently received not only the largest reserves but those that required the least investment before being fully operational as well. While I cannot say whom or what, it is quite known that we can flex our muscles enough to get what we want now. That is the unfortunate nature of where we are conducting business. If we didn’t do it to capitalize on our ideas, someone else would have and you would be interviewing them today not me. While I do disagree with certain aspects of a clandestine nature in the oil industry, it is an unfortunate inescapable happening. Everyone looks out for himself or herself, playing fair comes second. Another example would be a competitor we had at the earlier stages, we simply needed to pay money to certain officials to ensure they could not receive any of the lucrative licenses, ensuring that they remained far beneath us in operational size and profitability.” Do you regret some of the illicit decisions you took? “ To a certain extent I do, I do wish I could believe that people ran things fairly in our country but that just isn’t the case. The fact, if we didn’t do what we did, someone else would have and it would cost us the success we are enjoying now, whether just or unjust that is the reality.” Why do you think the correlation between oil and corruption is strong? “Oil is a commodity that has been in high demand by everyone since we invented the inventions we use oil to power. Its on the agenda for elections, its on peoples minds for prices, and its massive revenues for companies if found and operations run well. But most importantly is the fact that politics is so heavily involved in the business. We need licenses, permits; policies upon the environment heavily affect us. We spend millions during elections; any crisis in the industry has a big affect on prices. The simple fact is that for us to enjoy the massive rents we do it is in our best interests to keep them (politicians/officials) happy, for them it is in their best interests due to their dependencies on our product to keep us happy. And of course you have the massive gain on the individual level both for the political individual and business individual. We have an entire department and office, unmarked and unknown to the public of course that deals purely with the politics of our business. Located right near our capital, the entire office deals only with getting approvals and entertaining officials. However, if you were to enter the building you would never know that it belonged to us, the paper trail simply does not exist. The level of secrecy if you will is both amazing and sad.” If you know it is wrong why do you continue to do it? “ Because that is the environment here, today if there were to be a fire at my apartment, I would have to pay the firemen before they went in to douse the fire. True story by the way. The simple fact is it doesn’t matter whether I do it or not someone will. But I would rather be ahead then be the one that got screwed unjustly. Today I can afford a nice car, a large apartment, anything my wife wants, my son’s university tuition. Had I not done what I do, would all this yet be a reality, absolutely not Read More