Business Ethics and the Nigerian Oil Industry: A Study of the Niger Delta
- July 28, 2019
- Posted by: RSIS
- Category: Social Science
International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue VII, July 2019 | ISSN 2454–6186
Business Ethics and the Nigerian Oil Industry: A Study of the Niger Delta
Enuoh, Rebecca Oliver
Department of Business Management, University of Calabar, Calabar, Nigeria
Abstract: – The oil industry in Nigeria is considered the fastest growing industry due to the dependent of the economy on oil and gas resources. Several ethical considerations have been neglected either due to lack of effective monitoring by the appropriate authorities or the absence of such regulations. There are several practices that are observed in Nigeria which are viewed to be at variance with what is applicable in other parts of the world where such companies equally operate. This paper critically examines the oil extractive activities of the multinational oil companies operating in the Niger Delta Region of Nigeria and the environmental hazards caused by such activities. In relation to business ethics, the issues of gas flaring and oil spillage are considered to be deliberate and unethical activities. This is a theoretical paper based on review of related literature. The paper suggests that the federal government of Nigeria has a major role to play in ensuring that wrong practices by oil multinational corporations (MNCs) are stopped for the benefit of the citizens. It concludes that business ethics should be taken seriously in order for the MNCs to secure the licence to operate in the host communities and peaceful coexistence of both parties.
Key words: Business ethics, oil industry, gas flaring, oil spillage, environmental hazards, Nigeria
I. INTRODUCTION
The Nigerian oil sector plays a central role in the nation’s economy with over ninety percent of the nation’s foreign exchange earning coming from the sales of crude oil. Nigeria has about 36 billion barrels of crude oil reserve. It is estimated that the country has realized about 600 billion US dollars from oil since 1956 when it was first discovered in a commercial quantity at Oloibiri, in Bayelsa State (Atakpu, 2007). Earnings from oil are derived through the petroleum profit tax, sales of crude, royalties, gas and rent from the industry operators. There are three main business engagements in the Nigerian oil industry which are: Joint Venture (JV) i.e. Join Operation Agreements (JOA) between the Federal government and the oil multinational operators, Production Sharing Contract (PSC) i.e. where Oil Prospect NNPC acts as concessionaire, and Service Contract (SC) i.e. where Oil Prospecting License (OPL) title is held by the NNPC while the operator selected as the service contractor provides all the funds required for exploration and production work (Ihua et al 2009).
