Chevron's corporate social enterprise: A new model for private sector-led development

An aerial shot of the Niger Delta and the farmlands surrounding it. The Niger Delta region has experienced decades of political unrest and armed militancy. Photo by: Radio Raheem / CC BY-NC-ND

Nigeria, the largest and richest country in sub-Saharan Africa, obtains more than 80 percent of its revenue and about 90 percent of its hard currency from oil.

But not much of that money has benefited Nigerian citizens, including those who live in the oil-producing region of the Niger Delta. The region, which includes nine of the country’s 36 states, has experienced decades of political unrest and armed militancy, which could rise again as Nigeria approaches a general election in 2015. That same year, a government amnesty given to some 40,000 Niger Delta militants — at an astonishing cost of $1 billion — is also due to expire.

In this unstable environment, Chevron, which has operated in Nigeria for more than 50 years, launched an innovative model of private sector-led development. In 2010, the corporation announced an initial commitment of $50 million — not for corporate philanthropy or social responsibility programs, but for a “corporate social enterprise,” an original development paradigm that is unique in many ways.

First, instead of operating unilaterally, Chevron patiently knit together a multi-stakeholder coalition of donors and supporters, including Nigerian and international civil society organizations, local governments, Nigerian federal authorities, foreign investors and international aid agencies to partner in an effort to break the cycle of poverty and conflict. After extensive value chain research, the initiative decided to focus on three indigenous economic activities — fisheries, cassava and palm oil — and promote market-driven solutions to expand them. Chevron succeeded in leveraging its initial investment by attracting matching funds, generating a development fund worth approximately $100 million to be spent over five years.

A second unique feature is the two-tier governance structure. The Foundation for Partnership Initiatives in the Niger Delta was set up as a Nigerian-run, nonprofit organization to implement projects. PIND operates out of two economic development centers, in Warri and Port Harcourt, where PIND’s 17 current programs — focusing on small business development, value chain analysis, appropriate technology, civic empowerment, the role of youth and women, and self-help and rural development programs — are implemented. The centers are designed to eventually become financially self-sufficient by marketing their expertise and knowledge to business and government sectors.

Chevron also created a second nonprofit organization, the Niger Delta Partnerships Initiative Foundation, which has an international board of majority independent members and Chevron representatives who provide strategic guidance and monitor funding. This dual structure has the advantage of ensuring Nigerian ownership and operational control on the ground, along with international standards of accountability and transparency.

Economic development and conflict

A central premise of this endeavor is that economic development is not sustainable in an environment of chronic instability.  

Many organizations pay lip service to this principle, but few actually translate the notion into their programs effectively. It’s especially important in the Niger Delta, a community of 32 million people and 140 separate ethnic groups that have suffered decades of government neglect, official corruption and inter-ethnic rivalries. More than half of the population lives in poverty, and two-thirds of the population is under the age of 30.

If development is to come to this region, then peace must also be sustained, not merely through short-term mechanisms, such as the amnesty. Amnesty did bring some stability, but kidnapping, illicit trade, piracy, oil theft and crime are on the rise. So is political infighting. Some militants have threatened to revive the insurgency if incumbent President Goodluck Jonathan — who comes from the Niger Delta — is not re-elected.

This underscores the importance of the third distinctive feature of the new development model: the peacebuilding component. PIND is working with the Fund for Peace, a Washington, D.C.-based nonprofit which specializes in resolving conflicts in fragile states, on the Partners for Peace project. Nate Haken, primary adviser to the project, stated that it “has facilitated a grassroots network of citizens who have been trained in conflict assessment, information and communication technology, and program management.”

“They have organized themselves into state-level chapters so as to respond quickly to emerging conflict situations and stand for peace,” added Haken.

The project’s website provides a digital platform of local knowledge and communication, with a range of activities that map conflict trends at the local level while facilitating collaboration and information-sharing. So far, P4P has assembled an impressive list of 322 self-identified peace agents sorted by state and local government area, with more to come. They participate in training workshops, peace camps and chat rooms, and issue peace bulletins that precisely locate grievance-based violence where it usually starts at the local level. By working with other organizations, including the Council on Foreign Relations’ Nigeria Security Tracer, P4P enables civilians to monitor violence across the country. Workshops have been held with civil society representatives about every three months since 2010 to assess the risk of human security nationwide. This network has the potential to be a positive force for ensuring free and fair elections, promoting peaceful settlement of electoral disputes, and averting violence when the amnesty expires.

This model shows thinking out of the box. Chevron has launched an unprecedented experiment, which empowers economic entrepreneurs and peace advocates. By working to improve their livelihoods and striving for greater harmony in their diverse communities, Nigerian citizens are building a safer and more prosperous living space while fostering a better business climate. If adopted elsewhere, this model may look and function differently based upon the needs of other environments. However, its unique features make it a daring venture that other corporations and development agencies should look at closely.

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About the author

  • Pauline Baker

    Dr. Pauline H. Baker is President Emeritus of the Fund for Peace. She serves on its Board of Trustees and is also an independent director on the NDPI Board. Dr. Baker lived in Nigeria for 11 years, taught at the University of Lagos, and served as an election observer for the National Democratic Institute in the last four Nigerian general elections.

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