-By Olufunke Afolami
Foremost petroleum industry association, the Centre for Petroleum Information (CPI) had its 14th Industry Public Symposium through webinar recently.
The topic of the public symposium was on the issue of sustainability for the petroleum industry and how it could attain it to avoid unforeseen circumstances which the oil industry experienced in the last five months.
The Head, Community and Government Relations (CGR), Oriental Energy, Dr. Uwem Ite, who is an expert in sustainability, spoke on the topic “Can Industry Achieve Sustainability Beyond Palliatives?
The sustainability expert made it known that pandemic had been a severe potential downturn for decades. “The word pandemic was not even heard and people did not put much attention to it. When it happened, we heard about all kinds of things that happened many years ago. History became more important than geography”
It affected almost every country with substantial impact on the oil industry and Nigeria saw the benchmark in the price of crude oil. Obviously, it had negative impact, what should have accrued to the government was far below expectation. There was cut in global and local oil production. The Organisation of Petroleum Exporting Countries (OPEC), decided to give quota on oil production while individual oil companies struggled to meet up with their targets.
He explained that the situation deteriorated further to the extent that even when oil was produced, there were no buyers owing to lockdown across the globe, “end users of the product are not even there in business, a lot of issues happened and the demand was substantially reduced.”
Despite changing in profit, the industry response to the pandemic was at a high level including social responsibility. Suddenly, the word palliative became known and being used as everyday word to beneficiaries of industry support including individuals, communities and government at all levels. Corporate organisations were receiving letters from various strata of the society. How did the country got into a stage where people started looking for palliatives?
Dr. Ite stated that the first layer of sustainability is the environment which include the use of resources, pollution prevention, portable water and waste. Sustainability also means the standard of living, education, community, equal opportunities and gender balance. Energy efficiency, subsidies and the use of natural resources.
Sustainability stands on three divisions and for it to be achievable, they must be integrated for a perfect outcome.
On the aspect of palliatives which was a measure introduced during Covid-19 to cushion the effect of the pandemic, Dr. Ite said, it only addresses some issues, chief of it all was hunger, “people were hungry and they didn’t have food. I remember my organization, Oriental Energy, we received letters specifically for food.”
He bemoaned the giving of food items as palliatives which will only be for a short term as the oil industry is still catering for the wellbeing of communities in different locations across the country. “It is about time to donate different kinds of medical equipment and accessories to help the people.”
He explained further that Sustainable Development Goals (SDG), if integrated as a business practice within the industry, it will solve the issue of palliatives. Therefore, sustainability is the key word and it will not only alleviate poverty, people will be able to provide food for themselves without being given palliatives.
Dr. Ite asserted that palliatives were only an attempt to show people that the industry cares, but there is a limit to how continuously groups of people will be offered palliatives because it is not sustainable.
“How do we ensure that the industry is able to achieve sustainability beyond palliatives? This is not about re-inventing the will. It is about having the mindset because sustainability is a mindset.
The sustainability expert revealed that sustainability entails corporate policy and standard, risk assessment and management, stakeholders’ engagement, due diligence of project and reporting.
For corporate policies and standards, it is about having an effective management system. “It is not about re-eventing the will, it about using the current best practice and there are several of them in the industry.”
If there is no corporate mindset to contribute to sustainability, it will not work because when it is being put on the table, it might be set aside. A government and system that is centred on sustainability, the next level will be specific standard for operation as regards issues like health, safety and environment, social performance and delivery.
As operations are sustainable, the issue of palliative may not necessarily arise since it will be possible to pre-empt issues in the communities where a company operates.
There is need to also consider the technical and non-technical risk. They have to be identified to resolve issues. The non-technical risk should be side-by-side with technical risk. The two set of risks will ensure that mitigation measures are identified.
Another significant element of the framework is stakeholders’ engagement which is being proactive. The industry has to state its position clearly to understand stakeholders which are the communities, civil society and government at all levels. If it is done properly, it will establish and maintain trust by securing social license to operate.
Dr. Ite noted that the social license to operate in industry is key, without it, there will be disruptions in the company’s operations.
For Due Diligence, the sustainability expert said, it is another major issue that should be handled with utmost care because the industry must document all its projects. There is need to identify social economic and environmental baseline, design projects that soothe the communities with regulatory compliance in place.
Sustainability Reporting
Sustainability reporting provides a leverage as to whether an industry can achieve sustainability beyond palliatives. Sustainability has to be measured to communicate its performance through social and environmental means. It is useful for setting corporate goals and standards. “If you do not measure, you will not know where you are and you will not make the effort.”
Dr. Ite advised industry operators that sustainability reporting should be encouraged and integrated into core business practices in the industry so as to move beyond palliatives.
Sustainability is a continuous process due to changes of event such as the Covid-19 pandemic that ravaged the world leading to lull of activities. Nobody could have known that the world would pass through a sordid situation arising from the pandemic. “If you told somebody 20 years ago there will be pandemic in 2020 nobody would have believed such prediction, the world was unaware of it hence it has to adapt to current realities.” It requires balancing social economic and environmental principles.
The Issue of Palliative
The Head, CGR of Oriental Energy, made it clear that the industry should pay more attention to sustainability than palliatives. Palliatives basically are short term solutions or relief to socio-economic problems. “The food items given by the industry to different communities was just a short term, many of them may have finished their food by now.” It was a relief to the people because they were hungry due to the pandemic and lockdown. They needed support and the palliatives given by the industry did not fully address the root cause of their problems.
However, the pandemic has provided the industry opportunities to re-think commitment on sustainability issues in terms of corporate policies and best practice standard. But can industry stand the test of time and address the core principles of sustainability? This is a question to be answered in the future.
Dr. Ite urged industry leaders to use best operational practices to achieve sustainability beyond palliatives.
Dissecting sustainability from another perspective, Mrs. Ini Abimbola, a consultant with ten years’ experience, said Covid-19 gave a dress rehearsal for organisation. “Covid-19 has given us the realization that it is time for us to put important issues into consideration.”
According to Abimbola, the industry should move beyond palliative approach to sustainability in order to address the root cause of poverty, inequality and environmental issues. Initiatives that will integrate communities with innovative ideas and policy driven that will demonstrate best practices of organization within the energy sector. Communities and stakeholders are to be engaged to drive the agenda of organization.
Notwithstanding, sustainability gives hope for the future while palliatives only tentatively solve problems in the short term. Covid-19 is an eye opener for the industry to think beyond the box. The future is hardly predictable, but sustainability enhances circumstances arising from uncertainty.
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