ANALYSIS: In Africa, Exxon Mobil Looks for Ways to Do Good While Doing Business

DAR ES SALAAM, Tanzania (The Dallas Morning News/MCT) -

Exxon Mobil Corp. has more clout than many governments in Africa, after more than 100 years of harnessing – some would say exploiting – the continent’s vast natural resources.

As the Irving, Texas-based oil giant eyes continued investment in Africa’s traditional oil patches and beyond, it’s also spending millions of dollars on efforts to fight disease, improve education and empower women.

But for one of the world’s largest companies, just how much aid is enough to ensure the confluence of corporate and civic responsibilities?

Exxon Mobil’s philanthropic spending pales beside the billions in revenue that the company reaps each year. But Exxon Mobil officials describe a more complex calculus, that good deeds and good business can and do work hand-in-hand.

Earlier this month in Tanzania, Exxon Mobil sponsored the George W. Bush Institute’s African First Ladies Summit. The event brought together eight of the continent’s leading women to discuss global health, agriculture and economic growth.

Former president George W. Bush hailed Exxon Mobil as a “company with a conscience.” And while the company’s critics remain loud and persistent, many of the African first ladies gathered in Tanzania offered high praise.

Sierra Leone’s Sia Nyama Koroma, for one, said she would never forget Exxon Mobil’s gesture.

“If you have a conscience, you give back to society,” she said. “You own up to your corporate social responsibility.”

Exxon Mobil is one of the largest foreign investors in Africa. In the past five years, it has committed more than $24 billion to energy exploration and development here.

Those efforts are mainly focused in Nigeria, Angola and Equatorial Guinea. Exxon Mobil also is active in a growing number of other African countries. In Tanzania, a relative newcomer to energy development, Exxon Mobil is partnering with Statoil of Norway to look for natural gas off the Indian Ocean coast.

Such business spending often is enough to fuel extraordinary growth for the host countries.

As one Exxon Mobil executive wrote last year, the oil and gas industry’s overall investments in resource-rich countries “tend to dwarf the economic impact of bilateral foreign aid or humanitarian projects.”

But the history of Big Oil in Africa is complicated.

Critics have accused the industry of inviting corruption and dirty dealing. They say that has enriched Africa’s ruling class while average workers have benefited little from massive oil and gas deals. Many on the continent harbor a deserved suspicion of foreign intervention.

And social progress lurches in starts and fits, as many parts of Africa remain mired in what’s known as the “resource curse.”

Many times, the countries that need a boost the most are in the worst position politically to handle it. So developing countries rich in petroleum often end up less democratic, less economically healthy and more conflict-torn than they were before striking it big.

Take Nigeria, where 70 percent of the country lives in poverty, despite billions of dollars’ worth of oil exports.

Michael Ross, author of “The Oil Curse: How Petroleum Wealth Shapes the Development of Nations,” echoed others in saying that the conundrum isn’t primarily the fault of the oil companies. Exxon Mobil and others, he said, aren’t “evil or intrinsically exploitative.”

But the industry’s uneven record in oil-rich countries proves there’s much more to be done.

“Exxon has a responsibility to its shareholders,” said Ross, a political science professor at the University of California-Los Angeles. “But the impact it has when it works in a low-income country … is just enormous.

“This opens up the opportunity to do many good things, but also to have some harmful effects.”

Exxon Mobil’s leaders have long grappled with how deeply they should get involved in Africa’s affairs beyond doing business here. A company executive told The Wall Street Journal in 2005, “We are not the Red Cross.”

Still, like other companies, Exxon Mobil has made charitable efforts – to fight disease, build schools and assist women – part of its business equation on the continent. The company’s community giving totaled $256 million worldwide last year. About $44 million went to Africa and the Middle East.

“We feel a responsibility to partner with local communities,” said Suzanne McCarron, president of the Exxon Mobil Foundation, the company’s charitable arm.

That’s particularly true in Africa, she said, “to ensure they are experiencing the benefits of energy development and the benefit of our company’s presence.”

Private entities, working with nongovernmental organizations, have become increasingly active in helping developing countries. For oil companies, that’s happened even as the energy landscape has shifted in recent years, dimming Africa’s importance.

Not too long ago, many looked to Africa as America’s future energy source. But as domestic U.S. production has skyrocketed of late, imports from Africa – and everywhere else – are declining.

As an international player, Exxon Mobil sells oil all across the globe. And the demand for African oil does continue to grow elsewhere in the world, notably in China.

But as public- and private-sector partnerships flourish in Africa, continued investment here by Exxon Mobil and other major companies also has broad implications for national security and economic growth in the U.S.

“Africa is the continent of the future,” said retired Marine Gen. James Jones, former national security adviser to President Barack Obama. “We ignore Africa, in my view, at great peril.”

The companies also see benefits when they make a deeper commitment to foreign lands where they work.

When Exxon Mobil enters a new country, it conducts a needs assessment to see where it can do the most social good, officials said. The company also looks to employ a workforce that reflects the surrounding community.

Almost nine out of every ten Exxon Mobil workers in Africa are Africans, citizens of the countries where the company does business, officials said.

That helps explain why Exxon Mobil’s biggest and longest-running philanthropic work in Africa centers on combating malaria.

That push started because the disease was affecting productivity in Nigeria and Angola. Employees were getting sick, and it was hurting the bottom line.

So Exxon Mobil began a workplace program to eradicate malaria. It saw immediate results, so the effort was expanded to the community as a whole.

In the past 10 years, Exxon Mobil has spent nearly $110 million to battle malaria in Africa and Asia. It’s helped distribute 13.1 million bed nets – malaria is transmitted by mosquitoes – and nearly 1.8 million doses of anti-malaria drugs. As a result, mortality rates from the disease have gone down dramatically.

“It’s important for our business,” McCarron said. “It’s important for Africa.”

Education has been another initiative. Exxon Mobil has built dozens of schools in Nigeria alone.

And the company’s latest philanthropic push looks at increasing economic opportunities for women.

Officials said research indicates that women are more likely than men to spend their income on essentials like food, health care and education. In other words, investment in women becomes an investment in healthier communities. That, in turn, leads to sustainable long-term economic growth.

Even Exxon Mobil’s critics don’t dispute the merits of such efforts, although they said other companies’ aid programs were just as good.

Some said the humanitarian work is undermined by a lack of transparency involving oil payments to the countries where Exxon Mobil does business. Lots of money flows into government coffers. It doesn’t always find its way to average citizens.

“When governments come upon sudden wealth and it’s concentrated in the hands of the few, that limits the opportunities for accountability,” said Ian Gary, a senior policy manager at the anti-poverty group Oxfam International.