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As such, it is possibly easier to defend business entering the political and societal

arena in societies that already have powerful political institutions capable of

defining the terms for increased business participation in that arena.

Towards a political conceptualization of corporate social responsibility

In sum then, the social responsibility of business may be summarized as follows

(Table 4.1). Business has first of all an economic responsibility towards society,

that is, to making profit and enhancing value for shareholders, employees, the

local community and the society at large, while at the same time obeying what

Levitt (1958) called ‘the canons of everyday life’ (honesty, good faith and so on).

This responsibility derives from the basic aim of business in society within the

system of democratic capitalism. Second, business has an institutional responsi-

bility towards society, implying both a responsibility to confirm to the institu-

tional frameworks of society (both mandatory laws and voluntary agreements

legitimized through political processes and decisions) and to play a limited role

in strengthening the very same institutional frameworks.

Suggesting a functional approach to CSR – arguing that other institutions exist

in society to perform the tasks envisaged as a corporate responsibility within

the social activist approach to CSR – is not to suggest very strict boundaries

between the different spheres of society. Business, governments and civil society

institutions constantly interact and influence each other. Companies’ historically

grown institutional frameworks (Matten and Moon, 2005) – national history,

culture, business systems, systems of societal governance – are likely to heavily

influence managers’ perceptions of CSR, of legitimate values and of considerations

in business and managerial decision-making, thereby constituting different agen-

das of CSR from society to society. At the same time, from a neo-institutional

viewpoint (DiMaggio and Powell, 1991), new international standards and CSR

guidelines – often developed through multilateralism involving governments,

76 Bjørn-Tore Blindheim

Table 4.1 The social responsibility of business

Institutional responsibility Capacity building Supporting a strengthened

institutional framework

Public responsibility Compliance with politically

sanctioned standards and

guidelines

Compliance with national and

international laws and

regulations

Economic responsibility Making profit Obeying the ‘the canons of

everyday life’

Enhancing value for shareholders,

employees, the local

community and the society at

large

the business sector and civil society institutions – diffuse and may make manage-

rial understanding of CSR and corporate practice more similar across societies.

The point is that the different spheres of society are interconnected in many ways

and are likely to influence each other, resulting, for example, in companies and

managers taking a broader view of profit than is suggested within a strictly

neoclassical view of economics. However, what is important from a functional

viewpoint is that political power and resources are necessary to address many

contemporary, complex, societal challenges such as poverty, environmental

degradation, social inequity and lack of sustainable development in general. A

steadily evolving CSR agenda may undermine the capacity of political institutions

to perform their foundational tasks in society and the possibility to achieve

sustainable political solutions to societal challenges.

On this background, our conceptualization of CSR is based on a primacy of

politics and democracy to philosophy (Habermas, 1996; Rorty, 1991). It does not

start with philosophical principles, but with a recognition of a changing interplay

between governments, civil society actors and business, and the consequences of

that dynamic (Scherer and Palazzo, 2007). Such a conceptualization of CSR is

different from a social activist approach in several important respects. Most

importantly, the social activist approach holds that universal standards exist for

determining responsible corporate decisions and actions independent of the view

of other, including political interests. These standards typically have an ethical,

religious or metaphysical basis (Brummer, 1991). This implies that, in consider-

ing the welfare of others, companies are to respond to their constituencies’ ideals

rather than to expressed or current interests. Consequently, a CSR policy based

on social activism is decoupled not only from the positions and interests of its

current stakeholders, but also from processes of public policy. As such, the ideal

CSR agenda – from a social activism position – is given based upon philosophi-

cal principles and moral reasoning outside the framework of public policy. This

means that CSR, rather than being complementary to political solutions, consti-

tutes itself as an alternative and competing framework for solving social ills and

challenges of sustainable development. Because corporate managers, in the role

of moral leaders, voluntarily will address societal challenges because that is the

right thing to do, there is no need for broader political solutions (implying

increased risks for mandatory regulations).

Arctic implications

First, within the framework of capitalist democracy, business has an economic

responsibility towards society. Part of this economic responsibility is, however,

also to adjust economic activity to the existing ethical customs of society. Second,

companies have an institutional responsibility towards society. Most fundamen-

tally, political and civil society institutions may be understood as a circle encom-

passing the economic activity of business, giving direction to legitimate

economic life and value creation. The institutional responsibility of business is

most importantly to adapt its activity to the constraints and opportunities set by

Corporate social responsibility 77

political institutions, and, as such, not undermine these institutions’ capacity to

perform their foundational mission in society. Further, business may – in societies

where the institutional capacity to secure its inhabitants basic citizenship rights is

low – contribute to building such institutional capacity, that is, to play a limited

role in strengthening the circle encompassing and regulating economic life. What

then, might be the possible Arctic implications of such a conceptualization

of CSR?

The foundational question that can be addressed under the heading of

corporations’ institutional responsibility is the legitimacy of the presence itself

of the oil and gas industry in the Arctic. As pointed out by Fjellheim and

Henriksen (2006):

The universal dilemma is that we are witnessing an increase in the Oil and

Gas exploration in a warmer and more accessible Arctic in the very same

moment as we conclude that it is exactly the human use of fossil fuel that is

the single largest reason why the Arctic is getting warmer in the first place.

However, building on our conceptualization of CSR above, the question of the

presence of the industry in the Arctic region is, above all, a political question. As

long as there is a political request for the oil industry to increase exploration in

the Arctic, and that is the case in all the Arctic countries, then we might conclude

that it is not the companies’ responsibility to address the foundational question of

presence.

On the other hand, building on our conceptualization of CSR, what we might

question is the corporate and industry use of power and resources, through lobby-

ing and other instruments, to influence political institutions and society in general

to give them permission to expand their activity in the Arctic. Although compa-

nies are legitimate actors in the political process and discourse leading to deci-

sions on permission and, although it is hard to draw a line between appropriate

and inappropriate use of corporate power in the political arena (OECD, 2000),

some argue that the industry has gone too far in influencing the political

processes. Professor Thomas Chr. Wyller wrote in a Norwegian newspaper

that

we are experiencing a new phase in Norwegian oil politics in the political strug-

gle of expanding oil and gas activities to the Northern areas. He said that this

issue has dramatic dimensions where there are deep conflicts between business

and political interests, environmental considerations, fisheries, workplaces and

economic and security political aspects. He continued by saying that the issue is

an incendiary question and concerns our society, our globe and our government.

His article discusses how Statoil, through big commercials in the papers, tries to

influence the Norwegian population. He says: ‘this is not information, it is agita-

tion, and it tries to influence the value choice during a political process of open-

ing the areas for exploration or not’. The state still holds the majority of shares in

Statoil, and Wyller, a professor emeritus in political science, questions the demo-

cratic legitimacy of the way Statoil uses its power to influence the decisions of its

main owner – the Norwegian State.

78 Bjørn-Tore Blindheim

Building on our conceptualization of CSR – and regardless of whether or not

the corporations and industry have crossed the line for appropriate participation

in the political processes leading to permissions to expand oil exploration in the

Arctic – the industry has an institutional responsibility not to interfere inappro-

priately in the current and future political processes about industry’s presence in

the Arctic or in the political processes aimed at regulating their operations in the

region. This responsibility becomes even more important owing to the tendency

of oil and gas corporations to increase in size (e.g. through merging, as with the

former Statoil and Hydro – StatoilHydro since October 1, 2007) and, therefore, in

power and resources. As argued by Davis (1960, 1967), business is a social insti-

tution that must use its power responsibly, and with increased power comes

increased responsibility (‘the social power equation’).

Turning then to the first layer of responsibility in our conceptualization of

CSR, business – on the basis of its foundational task within a system of demo-

cratic capitalism – has an economic responsibility towards society. Most impor-

tantly, this responsibility is to contribute to economic development in society.

Further, this responsibility has to be conducted within ‘the everyday canons of

everyday life’ (Levitt, 1958) or ‘the ethical customs of society’ (Friedman, 1970),

implying considerations beyond mere profit seeking for the purpose of minimiz-

ing the potential negative impact of corporate activity on society and the natural

environment. Considering the substantial impact that oil and gas activity has on

society and the natural environment, this is a huge responsibility and an enormous

task. However, the exact nature of the economic responsibility of business cannot

be determined without paying attention to the political and institutional framing

of business activities. To do this, I use the Arctic Council’s Arctic Oil & Gas

Guidelines (2002) as a point of departure.

The 2002 Guidelines were adopted by the second Ministerial Meeting of the

Arctic Council, October 9–10, 2002, in Inari, Finland, with the following state-

ment: ‘We ... endorse the updated Offshore version of these Guidelines and

encourage the concerned stakeholders to apply them’ (Arctic Council, 2002).

Although national authorities are the main ‘concerned stakeholders’ for the

Guidelines, as stated when describing the general purpose of the Guidelines, they

‘may also be of help to the industry when planning for oil and gas activities ...’

(Arctic Council, 2002).

The 2002 version of the Guidelines was completed by the Protection of the

Arctic Marine Environment (PAME) working group under the Arctic Council.

The new version of the Guidelines – building on the principles of sustainable

development (Arctic Council, 2002) – however, represented a combined effort

from the other working groups under the Arctic Council, with assistance and

commentary by representatives of Arctic, regional and other governments, NGOs,

industry, indigenous people and the scientific community (Arctic Council, 2002).

As such, the Guidelines were updated with participation from important stake-

holders within the framework of a regional political body. Thus, building upon the

principle of public responsibility, they provide a solid foundation for defining the

issues and processes of CSR for the oil and gas industry in the Arctic.

Corporate social responsibility 79

The Guidelines are intended, first of all, to address the environmental aspects

and issues of oil and gas activities in the Arctic. However, they also suggest that

the potential socio-economic effects of offshore oil and gas activities are impor-

tant to consider and integrate into the planning and conduct of exploration and

development (Arctic Council, 2002). The general goals for environmental protec-

tion during oil and gas activities in the Arctic are stated as follows.

Offshore oil and gas activities in the Arctic should be planned and conducted

so as to avoid (Arctic Council, 2002):

– adverse effects on climate and weather patterns;

– significant adverse effects on air and water quality;

– significant changes in the atmospheric, terrestrial (including aquatic),

glacial or marine environments in the Arctic;

– detrimental changes in the distribution, abundance or productivity of

species or populations of species;

– further jeopardy to endangered or threatened species or populations of

such species;

– degradation of, or substantial risk to, areas of biological, cultural, scien-

tific, historic, aesthetic or wilderness significance, and;

– adverse effects in livelihoods, societies, cultures and traditional

lifestyles for northern and indigenous people.

In sum, the Guidelines particularly emphasize three interdependent areas of

concerns, here understood as important issues of CSR in relation to the oil and

gas industry’s expanding activities in the region: (1) conservation of living

resources for sustainable use, (2) indigenous people, livelihood opportunities and

cultural values and (3) air and water emission and climate change. Concerning the

first point, conservation of living resources, the Guidelines state that:

Necessary measures should be taken to ensure that Arctic flora and fauna and

the ecosystems on which they depend are protected during all phases of

offshore oil and gas activity. Special attention ... is required for species ...

which are resources for human use, particularly by indigenous people ...

(Arctic Council, 2002)

The conservation of living resources is seen as vital not only for conservation

in itself, but for the interests of human safety and the well-being of indigenous

people in the Arctic. This brings us to the second point, directly addressing

the indigenous population, livelihood opportunities and cultural values. The

Guidelines state that:

In planning and executing offshore oil and gas operations, necessary meas-

ures should be taken, in consultation with neighbouring communities, to

recognize and accommodate the cultural heritage, values, practices, rights

and resource use of indigenous residents. Arctic states, in cooperation with

80 Bjørn-Tore Blindheim

the oil and gas industry, should address the economic, social, health, and

educational needs based on equal partnerships with indigenous people.

(Arctic Council, 2002)

Third, and although cautiously, the Guidelines identify the oil and gas corpora-

tions’ responsibility for reducing their emissions of CO

as a third major area

of CSR in the Arctic: ‘Offshore oil and gas activities entail considerable inputs

of gases to the air ... . Air emissions may have effects on the climate’ (Arctic

Council, 2002).

Concluding remarks

From a corporate perspective, CSR may be highly important. Corporations may

sustain their own legitimacy through integrating the demands and interests of

society in general, and stakeholders in particular, in corporate decision-making

and activity. However, from a societal and sustainable development perspective,

CSR may be counterproductive to, or may undermine, the institutional conditions

required for a sustainable development path. It does this by legitimizing increased

corporate power in society at the possible expense of the civil and political sphere

of society, and by applying voluntary solutions rather than mandatory decisions

to the challenges of sustainable development. On this background, I suggest a

conceptualization of CSR within the structural features of capitalism and the aims

of every business organization, ‘stripping’ business of ambitions on the broader

societal arena and thus confining – and not expanding – the power of business in

society.

Notes

1 The challenges of Arctic societies are outlined in more detail in Chapter 2.

2 As Chapter 13 in its entirety discusses managerial and corporate implications of CSR

for the oil and gas industry in the Arctic, we keep the discussion here short and in

general terms.

3 Stavanger Aftenblad, March 24, 2006.

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