The Oxford-Achilles Working Group
on Corporate Social Responsibility

Abstract: In his presentation, Mr. Egset linked Statoil-Hydro's current social responsibility initiatives to the history of the two companies. Founded in 1972, Statoil was initially conceived with national objectives in mind. The company was to operate in adherence with strict environmental and social standards, and was designed to foster job creation and technology transfer to emerging industries in Norway. Governance of Statoil occurred within a clear division of roles of responsibilities for the Ministry of Petroleum and Energy, regulatory agencies and the corporate entity. Practices at both Statoil and Hydro have also come under the scrutiny of the Norwegian public, which places a high value on environmental and social objectives. Egset argued that these parameters have permeated the every day practice of Statoil-Hydro. Social responsibility at the company is far more than charitable giving or one-off initiatives; nor is it anything new. Rather, the firm seeks through all of its endeavours to foster positive development and growth in the communities where it operates. These practices have had notable outcomes within Norway, even in previously underdeveloped provinces. Egset highlighted the extent of job creation in the industry and the fact that Norwegian suppliers working with the industry have become internationally competitive in their own right. He argued, however, that as Statoil-Hydro goes global, the challenge is to translate these social responsibility practices to places with very different social and political situations.

Egset admitted that achieving positive and sustainable development outcomes in different countries has proved to be a real challenge. In his experience, the technical difficulties of upgrading suppliers involved in different processes of energy production are far less difficult to manage than the non-technical. The challenge is achieving robust results in places where the roles and responsibilities of those involved in governance are unclear and subject to frequent and radical change. In countries where the political and legal system does not provide the support for good business practice, there are real limits on what any individual company or group of companies can achieve. Mr. Egset cited as a possible model for positive change the Regional Development Initiative (RDI) headed by BP in Azerbaijan, Georgia and Turkey, in partnership with the IFC and EBRD and other oil firms including Statoil-Hydro. While he acknowledged the limitations of this initiative, he praised it for its long-term and regional focus and suggested that it has potential to work well alongside community investment programs. One of Saïd's MBA students who had been involved in the initiative in Azerbaijan, noted in her comments that while there have been problems with the RDI, in her experience Statoil-Hydro had brought to it a very consistent approach and insistence upon high standards and accountability.

Mr. Egset's presentation touched on several of the themes that have been developed in other presentations for the Oxford-Achilles Working Group. The Group has focused largely on the challenges of managing complex and global supply chains. These challenges include finding the right balance between private and public roles in regulating and upholding environmental and social standards. Egset underscored the importance of government and the limitations on what the private sector can achieve. Working in global supply chains inevitably brings multinational firms directly in contact with issues of economic development. Many of the other talks on this series have noted the political, social and cultural complexities of development. Egset also highlighted these complexities and emphasised that Statoil-Hydro's approach to CSR is fundamentally about fostering long-term development; it is not about working on the margins. The company's experience also shows that achieving its CSR objectives requires deep and consistent involvement with its suppliers. Another theme of the group has been on the impact that host governments have on the way that multinationals approach CSR. It was very clear in Egset's presentation that Statoil-Hydro embodies a distinctly Norwegian approach to CSR, and that this is deeply rooted in the culture and politics of the country.

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