University of Vaasa - Vaasan yliopisto

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In spite of the increasing importance and diffusion of CSR practices, however, some
questions arise: What is the relationship between business and development? What
has been the role of CSR with respect to promoting development during the past
decades? What are the real benefits of CSR initiatives for developing countries? This
paper aims at analyzing the complex and controversial relationship between business
and development; it then examines CSR initiatives undertaken by the oil and gas
industry in developing countries and discusses the main problems with respect to
their impact.
Business and Development Issues: Which role for CSR
Initiatives?
Nowadays many policy makers look at business as an important element in meeting
development goals (Blowfield & Frynas 2005). Nevertheless, the relationship
between business and development is extremely complex and controversial.
Business was for a long time left out of development thinking. “Although western
companies operated in developing countries, they were either ignored by
development professionals or seen as problematic. […] There was tacit acceptance
that the private sector would generate employment and contribute to government
revenues, but it was rarely thought of as having a central role” (Blowfield 2005:
516).
In the 1980s there was a significant change and private companies started to be seen
as the liberator of underdeveloped economies. “Although the optimism of this
economic rights view of business was subsequently tarnished because of exploitation
of workers, communities and the natural environment, many basic features of the
business-development relationship were defined at that time” (Blowfield 2005: 516).
International trade and investments are crucial for the development of Southern
countries and the success or failure of CSR is often judged according to its role in
terms of creating an environment aimed at facilitating flow of goods, services and
knowledge (Ite 2004; Blowfield 2005). It is common to use financial arguments for
promoting CSR both to business and development audiences; nevertheless, it is
impossible to base a discussion about social and environmental justice solely on
economic arguments. For example, if on the one hand CSR guarantees basic workers
rights in developing countries, on the other it accepts the rights of companies to lay
off workers and close down facilities without compensation and shields them from
any responsibility for the consequences of disinvestment (Blowfield 2005; Christian
Aid 2007).
Another way of looking at the business-development relationship is to see
developing countries’ populations as a market opportunity and to think about
companies in terms of providing goods and services to the poor. Unfortunately it is
not possible to assess the consequences of multinationals entering markets previously
served by local small and medium-sized operations yet, and for this reason it is
useful to consider these initiatives with caution (Blowfield 2005).