The Political Economy of Corporate Social Responsibility and Community Development: A Case Study of Norway's Snøhvit Natural Gas Complex

Abstract

This project uses stakeholder evidence from semi-structured interviews to analyze the relative effectiveness of an oil company’s stated “corporate social responsibility” (CSR) initiatives in a new, Arctic host community. Specifically, this project analyzes the outcomes of StatoilHydro initiatives to date in Hammerfest, Norway, where the Snøhvit (Snow White) natural gas project began production in 2007. It gauges the ability of “socially responsible” approaches to development to internalize negative externalities and promote positive “spin-offs.” Arctic countries are increasingly prioritizing petroleum development. The convergence of dramatic climate change, increasing energy demands, and high energy prices has made the Arctic an alluring frontier for the oil industry and Arctic governments. Small Arctic communities are increasingly playing host to large energy projects with the potential for dramatic cultural, social, environmental, and economic upheaval, but also economic growth and increased human capital. In this case study, CSR initiatives resulted in a broader accounting of social costs and benefits, an outcome that better internalized externalities, and pareto-improving trades between stakeholders and industry.