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Local Stakeholder Perceptions of Corporate Social Responsibility with Petroleum Development: a Case Study in Harstad, Norway

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Local Stakeholder Perceptions of Corporate Social Responsibility with Petroleum Development: a Case Study in Harstad, Norway Master’s thesis Local Stakeholder Perceptions of Corporate Social Responsibility with Petroleum Development: A Case Study in Harstad, Norway Melanie Jenkins Advisor: Dr. Ilan Kelman, Ph.D. University of Akureyri Faculty of Business and Science University Centre of the Westfjords Master of Resource Management: Coastal and Marine Management Ísafjörður, February 2017 Supervisory Committee Advisor: Dr. Ilan Kelman Reader: Dr. Auður H Ingólfsdóttir Program Director: Catherine Chambers, Ph.D. Melanie Jenkins Local Stakeholder Perceptions of Corporate Social Responsibility: A Case Study in Harstad, Norway 45 ECTS thesis submitted in partial fulfilment of a Master of Resource Management degree in Coastal and Marine Management at the University Centre of the Westfjords, Suðurgata 12, 400 Ísafjörður, Iceland Degree accredited by the University of Akureyri, Faculty of Business and Science, Borgir, 600 Akureyri, Iceland Copyright © 2018 Melanie Jenkins All rights reserved Printing: Háskólaprent, Reykjavík, ii Declaration I hereby confirm that I am the sole author of this thesis and it is a product of my own academic research. __________________________________________ Melanie Jenkins Abstract This thesis examines perceptions of petroleum development in the Norwegian Arctic city of Harstad in the context of corporate social responsibility (CSR). Petroleum has long been a significant monetary contributor to the Norwegian economy and Norway has the third largest potential for Arctic petroleum in the world (after Russia and the USA). There are many different voices involved in the decision-making and policy surrounding petroleum development and often it is the local voices that are not heard. The aim of this project was to identify these local voices. Data was collected through in-person, semi-structured interviews with 29 people. The project met its aim by identifying the perceived benefits and costs of petroleum development. Respondents preferred to focus on the benefits associated with petroleum development and spoke of the costs of petroleum development only when the costs were perceived to be close to them. This project showed that the people of Harstad are generally satisfied with the petroleum industry but they would like for there to be more economic ripple effects and benefits to their city. The costs of petroleum were more of an afterthought, with climate change issues not being a priority. This case study will provide an important source of data for CSR managers and community leaders who want to mitigate the impact of petroleum development from multiple perspectives, as well as to document residents’ concerns for future petroleum development. Understanding the benefits and the costs of petroleum development from the perspectives of local people can help petroleum companies alter and develop CSR programs to meet the needs of their local communities. Knowledge gained from studies like this will inform the government and petroleum industry to make better, socially responsible decisions. iii I dedicate this thesis to my partner, Peter Hartwick, who supports me, always. And to my future dog, Walter. v Table of Contents Abstract ............................................................................................................................... iii List of Figures ................................................................................................................... viii List of Tables ....................................................................................................................... ix Acronyms ............................................................................................................................. x Glossary (Amended from Norwegian Petroleum Directorate) ...................................... xi Acknowledgements .............................................................................................................. 1 1 Introduction .................................................................................................................. 1 1.1 Research Question and Objectives ........................................................................ 2 1.2 Importance of studying local stakeholder perceptions of CSR ............................. 3 2 Background ................................................................................................................... 5 2.1 Corporate Social Responsibility ............................................................................ 5 2.1.1 Knowledge Gaps ....................................................................................... 6 2.1.2 Different Frameworks ............................................................................... 7 2.1.3 Social License to Operate ......................................................................... 9 2.2 Petroleum Development in the Norwegian Arctic .............................................. 10 2.3 CSR in the Petroleum Industry ............................................................................ 13 2.3.1 CSR in Norway ....................................................................................... 14 2.3.2 Governance of the Norwegian Petroleum Industry ................................ 16 3 Methods ....................................................................................................................... 17 3.1 Study Location .................................................................................................... 17 3.2 Interviews ............................................................................................................ 19 3.3 Data analysis ....................................................................................................... 21 3.4 Limitations to Interviews .................................................................................... 23 3.4.1 Positionality Statement ........................................................................... 25 4 Results ......................................................................................................................... 27 4.1 Benefits ................................................................................................................ 28 4.1.1 Awareness of CSR .................................................................................. 29 4.1.2 Immigration / Emigration ....................................................................... 30 4.1.3 Petroleum Expectations / Ripple Effects ................................................ 31 4.1.4 Local Suppliers ....................................................................................... 32 4.1.5 Trust ........................................................................................................ 36 4.1.6 Benefits Summary................................................................................... 37 4.2 Costs .................................................................................................................... 38 4.2.1 Greener Oil ............................................................................................. 38 vi 4.2.2 Communication ....................................................................................... 39 4.2.3 Lofoten, Vesterålen and Senja Islands .................................................... 40 4.2.4 Costs Summary ....................................................................................... 42 5 Discussion .................................................................................................................... 43 5.1 Benefits ................................................................................................................ 43 5.1.1 Corporate Social Responsibility Programs ............................................. 44 5.1.2 Ripple Effects – “If the town is not benefitting then Statoil should leave...” ................................................................................................................. 46 5.1.3 Retention and Immigration ..................................................................... 47 5.1.4 Support and growth of local petroleum supplier companies ................... 48 5.1.5 Benefits Summary ................................................................................... 50 5.2 Costs .................................................................................................................... 50 5.2.1 Greater Use of Petroleum ........................................................................ 51 5.2.2 Lofoten Vesterålen and Senja Islands ..................................................... 52 5.2.3 Costs Summary ....................................................................................... 54 5.3 Future Studies ...................................................................................................... 54 5.4 Management Recommendations ......................................................................... 55 5.5 Conclusion ........................................................................................................... 56 References........................................................................................................................... 59 Appendix A: Interview Questions .................................................................................... 76 vii List of Figures Figure 1: Stakeholder Map recreated from Industrial Democracy and Industrial Management by Rhenman (1968) .....................................................................
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