New Petroleum Policy Promotes Better CSR Practices

The newly announced Petroleum Policy calls for better CSR practices in the form of raising the social welfare obligation in exploration phases by $5,000 in every zone i.e. from $25,000 to $30,000 a year; calling for more direct benefits to the locals in terms of offering at least 50% of the non-skilled jobs to them; and fostering more inclusive management of the exploration areas through local participation.

While these are welcome measures, the track record of compliance by the oil and gas exploration companies doesn't exactly muster much confidence. Despite the the concession agreements signed between the government and the MNCs working in the sector clearly including CSR-based action points, the MNCs have often left the locals holding the shorter end of the straw. Worse still, the regulators have demonstrated neither any clear willingness nor the ability to enforce the agreements, further exacerbating the plight of the locals.

One NGO, Participatory Development Initiatives, has been actively advocating for better enforcement of the agreements in Sindh province. With support from Oxfam GB, their 'Community Mobilization and Networking on CSR of Oil and Gas Exploration and Production Companies in Sindh' project has done good work in raising awareness about the manner in which the local population is being denied their right to benefit from the investments in the sector.

The new policy is a step in the right direction. But it can only come up trumps for the locals if the Government is serious about ensuring compliance and better still, if the private sector companies are sincere the promoting CSR.