By Kuony Jial,
June 3, 2022 — Let me take you for a journey to see why oil companies should be people centered business and why some skeptics think it is a tall order. In the process I will show you what they can do to achieve it. As we move along, you will be able to see what their moral responsibilities are and what practical steps they can take to transform these communities for the better.
Why have people centered business operations?
This piece of writing is partly inspired by the president’s speech delivered during the inaugural ceremony of Radisson Blu Hotel in Juba where he urged businesses to be people centered in order to secure long term protection for their investments. According to the international crisis group, Despite the staggering poverty and underdevelopment, South Sudan qualified as a middle income country at its birth thanks to its oil wealth
South Sudan is blessed with an enormous amount of oil reserves; in specific terms we are talking about 3.5 Billion barrels produced annually with about 90% of gas and oil reserves still untapped.
It is true that the major corporations drilling oil in South Sudan make a fortune from the sale of crude oil annually. The proceeds of around 55-60 percent of the total output goes to the three joint venture oil producers in the country. This ultimately gives them the moral responsibility to give back to these communities. Not to downplay their current efforts, it is worth mentioning that they are already doing some work to a certain degree, it just needs to be bolstered a little more to create much needed transformation.
Just an additional note. Remember that the oil sector contributes about 95% of Government revenue and contributes to 80% of GDP. Looking at these statistics, you now know what oil means to this country and its potential. I don’t want to get ahead of myself but I think it is safe to say the oil sector has the potential to take this country to a whole new level. Countries like Qatar and UAE are a living testament to this. This could be replicated in South Sudan as long as we have a deliberate plan of action and of course, execute the damn plan.
Corporate Social responsibilities of oil companies
Most of the communities where oil companies operate are in deplorable situations and need real and practical community development projects that can be implemented by both the oil companies and their partners. Some of these projects include but are not limited to access to clean water, health care, education, electricity, food security etc. let’s dive into more details about these programs.
Practical developmental initiatives that can transform communities
Access to clean water
Access to clean water is more of a luxury in some communities that live above these crude oil reserves. People fetch water from streams, rivers or shallow wells and use it directly in their households. Drinking unclean water is responsible for most of the health issues that affect people in these communities. There are many ways the oil companies can address this issue, first is to do the traditional drilling of boreholes in places where this is feasible, water conservation through establishment of water reservoirs from the rain that can be used during the dry season can also help. This needs to be supported with provision of water treatment facilities that will purify water fetched from various water sources thus making it appropriate for human consumption.
Proper health care
Health care in this country is in a very poor state to say the least, some parts of this country where the oil is produced and in theory expected to benefit from community development projects sponsored by oil companies aren’t any better, if anything they are doing terribly bad. This begs the question, what can be done to make this better? I totally understand that these companies can’t start and operate health facilities which seems extreme but they can work with actors trying to provide healthcare in these areas. Local NGOs who are operating with meager resources to provide health care in these communities can be boosted through provision of supplies of modern health equipment and medicines plus cash grants to facilitate their day to day activities. Government run health facilities can also benefit from similar assistance especially if you come up with schemes that provide allowances to health care personnel to ensure high retention of staff at the facilities. This can be extended to Private health care institutions that provides secondary health care to ensure that citizens get the best health services within the country thus providing an in-country option to those seeking to travel outside to get health services, this should translate to majority of health care services money being used within our borders to improve the economy.
Education support
Sewing classes being conducted under trees is not an uncommon feature in the oil producing areas, these images are at the very least shameful in areas that produce this precious product that is the engine of this country’s economy. Access to education in these oil producing communities is very low, the latest report indicates that over 2 Million school going children are out of school in the country. There are many factors contributing to this ranging from localized conflict to displacement caused by floods and the list goes on. Apart from these facts, the issue of lack of access to physical learning space and the teachers are very much real. The oil companies cannot solve all the problems for sure but they have the ability to do a lot more and this can transform the education of children in these communities in a much bigger way. Let’s say they work with local partners to implement another version of GESS in areas that are not reached by this program, this will ultimately lead to more enrollment thus bringing down the numbers of out of school children, Teachers incentives will also ensure that teachers are motivated and that will reduce the turnover rate of teachers and putting in place teachers where there is none. The issue of classrooms in the short term can be addressed through erection of temporary learning space especially in the IDP settlement and IDP camps but this should be limited to temporary settings. Permanent classrooms should be the de facto standards for any classrooms built in the communities. Provision of scholastic materials surely needs to be added to these measures.
Access to Electricity
Access to electricity is more of a luxury in the communities that pump the oil that power other parts of the world. This is unacceptable especially when there are practical steps that can be carried out by the operating companies to provide electricity using more sustainable means. With the abundant sunshine throughout the year in most parts of the country, solar system installation can be easily done in most of the communities. Street lights powered by solar and rechargeable batteries can keep the streets safe at night creating safer towns and villages in the process. Solar fields can be established to provide electricity to small communities or installation can be made at household level if that is more appropriate. They can also go old school and install powerful generators that can light up small towns and villages without breaking the bank. I mean, one generator that powers a single office unit in Juba can power a village with dozens of homes considering that power utilization is not that high in remote areas.
Food Security
Majority of South Sudanese, to be specific about 80% derives their livelihoods from agriculture with the majority producing subsistence crops. Of all this, most of them use less effective traditional hand tools that can’t help in large fields and that explains why there is much focus on subsistence farming. The latest figures from the UN indicates that 75 percent of the population is facing severe food insecurity; this translates to 8.3 Million people in a country that is estimated to have around 11 Million people. The factors that caused this are vast and wide and there is a need for a coordinated process to address these complex issues but for now I will focus on what the oil companies can contribute to addressing the problem. There are a lot of efforts in addressing food insecurity but it seems to have challenges in producing a lasting solution, we all know that food aid is a temporary measure which humanitarian agencies have managed quite well to a certain level within their means, the real problem is having sustainable food production. Some institutions are working to address this issue but I think there is a need for heavyweight actors like oil companies to come in and provide the missing link. Most assistance revolves around provision of seed, hand tools, fishing gears, some basic training and in most cases it stops there. This is fair enough if you want to feed a household but very inadequate if you want these farmers to feed a community let alone a nation.
Mechanized Agriculture is the Way to go, the Government has done good in the past by providing all states with tractors, we need to get them to the fields if they still exist or get new ones. Petrodollars can help fuel, maintain and pay the personnel to get them running. With the realities of climate change settling in, rain fed farming is no longer sustainable if you want to maintain constant yield during harvest. It is high time we use our share of the River Nile productively, there is a need to establish an effective irrigation system that can use the Nile water and water collected in the reservoirs during the rainy season where access to a river is a tall order. This should target commercial farmers so that the impact is felt across the country. More food produced will mean reduced food prices in the long run and if the farmers go overboard this will mean exporting food to other countries bringing in foreign currency which can help in meeting local demand for hard currency thus helping stabilize the currency fluctuation and economy in general.
Private-public partnership
The oil sector is one of the biggest players in South Sudan’s private sector. It has the ability to introduce massive partnerships with the Government and other partners that can transform communities making this country one of the vibrant and thriving economies in the region. There can also be real partnership between the profit making institutions and the non-profit organization that can be instrumental in delivering programs that profit making companies are not capable of doing because of their operational nature.
Executing the grand plan
Without wasting another minute, let’s get busy and devise a mechanism that can be used to execute this grand project.
There is a need to establish a community development department if it is not there already, most of the oil companies operating in South Sudan have something to that end and this should be ready to move. This department should be so powerful that it is represented at the highest level of leadership to ensure that they represent the interest of the communities very well, in other words they should act like the “embassy” of the local communities within the oil companies. I know it can be tricky especially considering the fact that the company is paying them and not the community but let’s assume that it works for the better.
With the department leadership in place, let’s look at the technical capacities needed by the department. First you will need experts in different sectors depending on the programs that the departments need to support and this could range from Education to health experts etc. You will need in-house finance, partnership and procurement personnel that will help in managing payments, contracts and agreement with partners tasked with doing the heavy lifting.
The department’s role is to ensure that the right institutions including local businesses and non-profit organizations are engaged to deliver the outlined community development programs. Some aspects of these programs like construction of classrooms for example can be delivered economically by private businesses but running the day to day operation of a school will be better placed with a non-profit organization. This kind of analysis need to be done frequently to maximize value for money
Where is the money at?
I know these are great ideas but one thing we all know is that they are not going to implement themselves without someone footing the bills. Well, different donors can come in and fund these programs but for now I will focus on what oil companies can do. First of all, most if not all the oil companies have departments of community development Community development. In theory, the companies should remove a percentage from their profit periodically and channel that through their department which is responsible for executing development projects in the community. this is the first and most important source to fund these programs. The second source of funds is the percentage allocated to the oil producing states. This is a good chunk and needs to be channeled to funding these programs too.
These recommendations are not limited to oil companies operating in the Greater Upper Nile region only, this also applies to gold mining companies in Eastern Equatoria extracting gold in kilograms and the logging companies in Central and Western Equatoria making fortunes from our forest and other companies making a fortune in various sectors in these countries. Good companies produce annual reports stating what percentage of their profit has been returned to the communities they operate in and how it has helped them.
As stated by the President of the Republic, “Relationship with some few powerful people cannot give permanent protection to your business, but having a people centered business operations can protect your investment forever”
Author
Written by Kuony Jial reachable through kuonyjial@gmail.com
