Regulation of Corporate Social Responsibility (CSR) in the Extractive Industry

What is it about?

This paper used the Nigerian Extractive Industry Transparency Initiative (NEITI) Act 2007 to examine whether compulsory regulation can improve CSR. On the background of a detailed discussion of Nigeria and its CSR related regulation of Nigerian Extractive Industry, the paper highlights the justification for the stricter CSR regime in Nigeria, the limitation of existing approach, its potentials and provides suggestion on how to improve CSR through regulation.

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Why is it important?

This paper finds that compulsory regulation is not alien to CSR and has great potential for improving CSR. However, the process of developing each regulation must be based on at least an optimal level of stakeholder engagement and independence of stakeholders. Also the regulation needs to be defined, coherent, specific, and practicable. This in no way depreciates the value of voluntary CSR whenever it is effective. It however, confirms that compulsory CSR has more success potential.