Towards a Framework for Integrating and Evaluating Corporate Social Investments in Extractive Sector Business Operations in Sub-Saharan Africa

International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue XII, December 2020 | ISSN 2454–6186

Towards a Framework for Integrating and Evaluating Corporate Social Investments in Extractive Sector Business Operations in Sub-Saharan Africa

  Theophilus Jong Yungong,
Department of Political Science and Comparative Politics, University of Buea – Cameroon

Abstract: This paper sets out to suggest a framework for integrating and evaluating extractive sector Corporate Social Investments (CSI) in the business operations of extractive firms in Sub-Saharan Africa. It designates CSI as voluntary programs that aim to enhance development opportunities for host countries and communities to extractive firms in the region. The underlying premise of this paper is that CSI interventions are often claimed to be developmental but there is neither a straight link between CSI and development nor guarantees that this can be achieved in ways considered just, balanced and sustainable. It, therefore, suggests that the extent to which CSI can deliver on development opportunities will depend on the way it is structured, effectively integrated into the business operations of firms and monitored for intended results. The bone of contention therefore is on how to determine development-oriented CSI. To address this concern, this paper develops the front and backend activities approach to integrating CSI in the business operation of firms and evaluating its developmental impact on the target communities. This framework builds on existing literature and the novel concepts of CSI applicability and CSI effectiveness. It also introduces the notion of results-based CSI. This is not only in terms of inputs and activities, but most importantly, in terms of outcomes and impact of CSI interventions.

Keywords: Corporate Social Investments, Corporate Social Responsibility, Sustainable Development, Extractive Sectors, development

I. INTRODUCTION

This paper advances a framework for evaluating extractive sector corporate social investments (CSI) in resource-rich communities in Sub-Saharan Africa. This proposition is being considered at a time when CSI is receiving greater emphasis as a fundamental theme in sustainable development and is fast becoming a trendy claim in the corporate culture of extractive firms working in sub-Saharan Africa. CSI is considered here as corporate community development activities aimed at maximizing value retention in resource extraction for host countries and communities to extractive firms. This definition will be revisited momentarily. Preliminary evidence shows some degree of CSI awareness among extractive firms operating in Sub-Saharan Africa (UNECA & AU, 2011). The CSI claims of these firms however have been heavily criticized as amateurish and passive (Gond and Moon. 2011). This study sets out to question the circumstances under which CSI can be considered an effective practice in the business operations of extractive firms in Sub-Saharan Africa. It aims to suggest a framework for monitoring effective extractive sector CSI policies and practices and evaluating them for results. Some methods of CSI integration have been suggested in the literature. This includes suggestions from the International Finance Corporation of the World Bank(IFC, 2010) as well as the Shared Value proposition by Porter and Kramer (2011). This study does not discard them. It builds on these ideas by advancing the novel concepts of CSI applicability and CSI effectiveness and incorporating the notion of results-based CSI as opposed to activity-based CSI. These all add up to advance the front and back-end activities CSI evaluation framework. By using this approach, multinational companies and development stakeholders in Sub-Saharan Africa will be able to standardize CSI practices and determine and reward effective CSI efforts against failing ones. This is not only in terms of CSI inputs and activities, but most importantly, in terms of outcomes and impact of social investments. The paper sets off by examining key background issues in this subject area. This includes situating CSI within the wider area of CSR as retained in this study. It examines the case for CSI integration and inherent weaknesses in CSI claims by extractive firms. This opens the leeway to developing the novel concepts of CSI applicability and CSI effectiveness and its associated front and backend activities approach to evaluating extractive sector CSI.

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