7.4. CSR policy approaches in China, Angola and the DRC 1. China
7.4.2. Angola
The appreciation and comprehension of the environment are the key processes in evaluating the potential success of a global project (Aaltonen, 2013). When dealing with the CSR issue project within the Angolan borders, it is important to comprehend the entire nation-state’s socio-economic and political environments. By doing this, the potential partner/investor associates the key stakeholders within the African nation- state, most significant stakeholder dependency ties, including the CSR issues that need to be dealt with. It is significant to distinguish the fact that Angola had concluded 27 years of civil war at the start of the 2000s. The conflict resulted in up to 1.5 million deaths and the destruction and ravaging of the infrastructure (United States
138
Government Accountability Office, 2013). Even with the dissolution of the long civil war, Angola remains behind Nigeria with oil production within Sub-Saharan Africa.
This is the case even if the African nation-state has experienced production increase in the years that followed the war dissolution including the resumption of duties in various oil fields located in the deep waters. In addition, the timing was and is still right with the steep oil prices in the global market supporting Angola’s high growth rate (United States Government Accountability Office, 2013).
Despite its comparably high-income level of individual people and oil reserves, more than 54% of the African nation-state’s population lives on less than ‘$1.25 per day’
(United States Government Accountability Office, 2013). In alternative interpretations taking into consideration, other mineral resources which are of abundance in Angola, this phenomenon has been interpreted and broadly understood as ‘resource curse’
(Genasci & Pray, 2008), with the general implications that nation-states that are mineral resource-rich often evolve at a very slower rate than those which are not. In Angola, both the oil and petroleum industry is still the principal engine driving the development of the economy. In the previous decade, the industry accounted for almost 46% of the nation-state’s GDP and accounted for almost 96% of the its exports (World Bank, 2013). Angola is understandably known to be a developing nation-state that is recovering from a prolonged civil war. Its post-conflict process is also made up of intensive development of various state institutions, brand new legislation adoption and implementation and alternative regulatory process in various sectors including agricultural cultivation, resource extraction, infrastructure construction, renovation and so forth.
One might argue that with only less than 2 decades since Angola has evolved from the political instability period, this might have not been sufficient time for the African nation-state to formulate a comprehensive approach to the CSR issues. During the time of the research performed for this thesis, no important legislation and/or strategic documents of government in Luanda devoted to the issues of CSR in particular (like to Chinese Guide Opinion and Company Law), have been discovered by the researcher. Nonetheless, in the year 2012, ‘Law Nº 8/12’ was appropriated which introduced the well-known patronage law, as a significant supporting instrument, through which the government in Luanda sought to find a way in which it can free itself
139
from its obligation to furnish funding in the areas that can easily be funded by the private sector (Mihić, et al., 2019).
By adopting this law, Luanda has provided different tax and incentive benefits for various charity donations and activities in cultural, sports, educational, social, technological and youth sectors including within the healthcare sector (PwC, 2016/17).
Angola has witnessed important disparities in various sectors of its industries in line with CSR. In gas and oil, more mature management of CSR can be easily observed (UNDP, 2013). One of the driving forces for this is the companionship of the leading global petroleum companies, such as ENI, ExxonMobil, Total and Chevron with their well broadly explained and applied CSR approaches. Not all of the companies though show a similar degree of maturity and involvement in the CSR initiatives and practices.
Generally, positive development of social responsibility paradigm is evident. This is even the case when findings propound that CSR initiatives are customarily deemed not very significant when appraising applications for contracts and licenses with the principal differentiating factors in respect to the pricing and technology strategies (Wiig
& Kolstad, 2010).
Based on the UNDP (2013), instead of endorsing donations and/or infrastructural construction as a charity, various businesses and companies are extensively concentrated on detailing and implementing the integrated projects that emphasise economic growth and people development, through the vocational training of people and higher education programs. This is also comprehensively understood as one of the ways of endorsing poverty reduction (Skedsmo et al., 2013). For example, Total has reported that in each project undertaken in Angola, the stakeholders anticipate the company to provide employment. The company attains its aims of CSR through captivating local staff, which is often seen on the company projects where 70% of the affiliates workforce are local and fosters economic diversifications of most of host nation-states and communities by endorsing the local initiatives (OSISA, 2012).
According to the results of the UNDP’s (2013) study, most of the business entities and/or companies that were analysed still had no strategic framework regarding the social responsibility initiatives, contemplated in the percentage of companies in this sector which showcased no single CSR strategy. When analysing the issues of CSR
140
in Angola, it is deemed significant to understand that the active development of the oil and petroleum industry has been escorted with additional legislation within the sector, although the study has not mentioned a comprehensive CSR document/ strategy that has been adopted till this date. There are still three various channels that are deployed to encourage contribution to the social activities, two of which are mandatory by law and one is voluntarily (OSISA, 2012). Within the first channel, the Petroleum law mandates all companies to perform various activities coordinating with the distinctive government organisations and representatives towards the attainment of the goal of further promotion and development of economic and social advancement of Angola.
This is also meant to give preference to national services and products and the integration, recruitment and training of the Angolan personnel and equipping them with relevant skills (Mihić, et al., 2019).
The very same law mandates that the segment of the signature bonus that is recompensated to the National Concessionaire (State Owned Company Sonangol) has to be set forth into projects and initiatives for the promotion and advancement of the Angolan private sector on the regional and local level under the terms which are government supervised. Even if this is the case, little is known as to how these funds are utilised (UNDP, 2013). The second channel has to do with the Production Sharing Agreement (PSA), which need companies to support the projects of CSR (Mihić, et al., 2019). For the current study, the researcher used the PSA that perform the duties of model agreement between a partner on production and exploration of Hydrocarbons in Angola and Sonangol.
The obligation of the Contractor Group in this instance is mandated to recompensate Sonangol with certain contributions and bonuses for social projects. From this, one can argue that the obligation scope differs from one PSA to the other (Mihić, et al., 2019). The very carbon-copy document has outlined an obligation for the knowledge improvement and professional qualification of the local personnel of Angola, encompassing the knowledge improvement and/or know-how on petroleum technology, and imperative management practices. All of the activities in training originate out of the Contractor Group and are inspected by the authorities of Angola based on the three-year planning. The last channel has to do with various projects that are funded by post-tax voluntary contributions.
141
These are commonly promoted by Multinationals. They are administered by the oil companies themselves, and to some extent, in collaboration with the churches and other NGOs. The oil and gas sector is one of the most methodical CSR activities in the African country. This is the case even though alternative areas are still in the process of modelling their broader comprehension of what CSR and its actions should entail. The UNDP (2013) reports that the oil and gas sector has shown more maturity than the construction sector. This is because most of the construction companies are still without any strategic approach to CSR. Equally, identical problems can be nuanced from within the banking sector and transportation which the CSR is to a greater extent rudimentary. From the general overview, one can conclude that the Angola approach to CSR is based on the notion of global companies themselves individually taking upon themselves the responsibilities of financing and supporting the multiple social programmes and initiatives in the African nation-state. The effort by the Angola to embark on a comprehensive legislature that explains certain CSR activities and make them mandatory can assist in preventing multinationals in Angola from generating profits deficient to the country’s development and reconstruction efforts (Mihic et al., 2019).