CSR in ADDAX Petroleum

In the minds of people, the petroleum industry often resonates with negative events: oil spills. The Gulf of Mexico, Brent Spar, Nigeria and the Exxon Valdez, are just a few incidents among many. It is legitimate for the media to report on these sad happenings, but little or no reporting is done on other aspects of the industry. Oil and Gas is a risky business that often comes with a bad reputation, and that is why being a good corporate citizen is essential. For Addax Petroleum, this means integrating its CSR activities in the company’s strategy, values, and operations.

CSR is values in action

As a subsidiary of the Sinopec Group, which signed off on the UN Global Compact in 2004, Addax Petroleum considers CSR as an integrated approach to good governance. In the words of Marie-Gabrielle Cajoly, Head of Communications & Corporate Social Responsibility at Addax Petroleum, “CSR is about putting values in action. It begins with establishing a strong corporate culture based on a values system which is aligned with international standards and has to be integrated into the everyday business.” Addax Petroleum’s core values system reads as: Integrity through Action, Harmony through Diversity, and Value Creation through Excellence. Several initiatives by the company aim to translate this into practice. In addition to an integrated HSSE Management System (Health, Safety, Security, and Environment) and programmes aimed at mastering employees' awareness about cultural sensitivity, regular online training contributes to enforcing the company’s Code of Conduct in day-to-day life. Similarly, included in the “Employee Handbook” given to all new employees, is an abstract of the company’s Code of Conduct as well as its core values.

Within the oil industry, there are a number of sector specific associations providing guidance on environmental and social issues that Addax Petroleum has joined. Most oil companies are signatories to one or more of these initiatives that provide the sector with common standards. Using them makes it possible to benchmark oneself against competition. In this sector, as in many others, there are debates about creating a level playing field and it is often argued that what the oil industry needs is more and stricter regulations. This could have several benefits, one of which would be an improved image and better public perception of an industry we cannot live without unless we make dramatic changes to our lifestyles.  

Sinopec-Addax Petroleum Foundation– Teach a man how to fish

The increasing engagement of the private sector in development issues is another trend in today’s global society. As an important economic investor in West Africa, ADDAX Petroleum is used to receiving numerous funding requests for social projects and runs a number of community relations programs out of its local offices in Nigeria, Gabon and Cameroon. Over time, the company has decided to expand its social commitment beyond its countries of operations, and has developed a corporate philanthropy strategy. In order to implement it in a transparent, strategic and systematic manner, the Addax Petroleum Foundation later know as the  Sinopec-Addax Petroleum Foundation (after the acquisition of the company by the Sinopec Group) were established  in 2007 and 2011 respectively. This was seen as a unique way and clear sign of Addax Petroleum’s and Sinopec’s social engagement beyond the company’s commercial interests. To date, when compared with Exploration & Production (E&P) companies of the same size, Addax Petroleum is the only one to have set up a foundation.  Since its start it has awarded more than 70 grants. Today, it supports 19 on-going projects in 18 countries, and focusses on three core areas: health, education and the environment.

Development, not charity Sinopec-Addax Petroleum Foundation– Teach a man how to fish

The mission statement of the Sinopec-Addax Petroleum Foundation quite simply reads: “Fighting poverty in all its forms”. This translates into a practice where projects must improve long-term sustainability. As a result, charity-like projects are avoided. Self-sufficiency should be the main goal of the projects, and therefore grants are given to organisations and institutions that design, elaborate, and carry out initiatives with that focus.  While kicking-off the “Addhope Forum”, a multi-stakeholder dialogue event organized in Geneva by the foundation in May 2013, Mr. Zhang, Chairman of the Foundation and CEO of the company, illustrated this philosophy using a Chinese proverb: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”
It is also important to the Foundation that the projects respect local cultural habits and make it possible for people to stay and live in their local community. Presented at the “AddHope Forum”, an example of the projects supported by the Sinopec-Addax Petroleum Foundation is one currently run in Tanzania by Swiss NGO Swisscontact which aims at developing skills in the agricultural sector. Trainees, youth and smallholders learn how to cultivate crops using efficient and environmentally sustainable methods. Participating youths increase their chances of getting a job, while smallholders increase their income using their acquired knowledge, therefore supporting themselves by their own means.

While Addax Petroleum, as a company, provides support to infrastructure development in the countries where it operates, the Foundation primarily focusses on development issues.  In Togo and in Burkina Faso, where more than half of the population doesn’t have access to clean water, the foundation supports IAS, a Geneva-based NGO, to dig wells and equip them with a pump powered by electricity generated by solar panels to provide fresh clean drinking water. But even in such a case, the infrastructure is not the bottom-line. The project has positive side effects such as transferring skills to the local population. Thanks to ongoing training, the community does not need any outside help to keep the newly implemented water and electricity systems running. Villagers reap the harvest of their work.  Simply put, infrastructure is not an end in itself but a means to an end: sustainable development. What really matters is the sense of well-being that good lighting provides to the community as a whole: children can continue to learn and do their homework in the evening, medicines can be kept in a fridge, medical assistance is provided in decent conditions, and community work and activities are pursued irrespective of sunset.

The link to the main business – Walk the talk

Companies of a certain size invariably run projects to support local communities. It is sometimes considered, however, that companies engage in CSR mainly to meet their customers’ expectations. Some even argue that the social engagement of a private business should directly relate to its core business and profitability challenge to be sustainable. Is that to say there is no business case for CSR for a company that has no customers per se? Marie-Gabrielle Cajoly has a more balanced approach: “Addax Petroleum is a B2B company, which means that we are not in direct contact with the end user. Even so, there is a strong rationale for our CSR engagement. The fact that it is run with heart does not mean that the decision-making process is only based on reasons of the heart. CSR is a systemic way to commit to the principle of public accountability. As an oil E&P company, it is essential to care for our societal and environmental impact if we want to run a sustainable business. Moreover, in our countries of operation, mainly in West Africa, about 95% of our employees are local nationals. All want to represent a company which adds value to their country and that they can be proud of”. It follows that a company simply cannot hide from its surroundings and that input from the employees helps drive and strengthen the CSR consciousness of Addax Petroleum. 

A cultural melting pot: +30 nationalities

It is understood that true CSR engagement efforts must be anchored in a company’s strategy, values, activities and processes.  But isn’t it just a way to build a strong and positive reputation? “To gain credit for it, CSR must be a goal, not a tool,” says Cajoly. “As long as a company “walks the talk”, there is no problem in the connection between corporate social responsibility and reputation”, she adds. A good reputation is doubtless a way for a business to reduce risks as it creates a common ground of interests between the company and its stakeholders. Often, situations arise or are exacerbated due to suspicions, frustrations or lack of knowledge. With an honest and transparent approach, these factors can be reduced significantly.

One additional benefit to a company of successful CSR is that it makes hiring and retaining staff easier. The oil industry is a business where there is fierce competition for talents. A strong positive public image makes a company more attractive to potential employees. The cultural and social awareness demonstrated by its philosophy runs throughout Addax Petroleum. There are more than 30 nationalities represented in its Geneva office and if all the nationalities encompassed in the company are included, Addax Petroleum is home to more than 50 nationalities, without talking about all the ethnic identities present locally in the countries of operation. Training on cultural diversity is organized across the company and is mandatory for all staff. Creating a workplace that respects all cultures is a high priority in the company and an additional essential component of its CSR.

Sinopec/ADDAX Petroleum international memberships:
OGP (International Oil & Gas Producers Association)
IPIECA (International Petroleum Industry Environmental Conservation Association)
UN Global Compact

This article is based on an interview with Marie-Gabrielle Cajoly held on Wednesday 29 May at Addax Petroleum, Geneva, Switzerland.

Photo credit: Gwendolyn Crespo / Addax Petroleum