Participation in Benefit-Sharing Arrangements in the Komi Republic

Abstract

<p>The oil industry is vital for the economy of the Komi Republic in Russia. It also benefits the municipalities<br />near oil production sites in terms of benefit-sharing agreements between oil companies and local authorities.<br />These agreements compose an important part of the corporate social responsibility (CSR) of oil companies<br />working in the Komi Republic, and in Russia in general. While this financial support is essential for<br />local communities, local people also primarily bear the negative environmental impacts of oil operations.<br />Yet, they rarely have a chance to participate either in environmental decision-making or in formulating benefit-<br />sharing agreements. This paper discusses why this is problematic, and demonstrates new developments<br />in Russian CSR practices: in 2015, the oil company Lukoil-Komi concluded a new type of benefit-sharing<br />agreement with the indigenous peoples’ association Izvatas. In addition to traditional social benefits, the<br />company agreed to consult the communities on new projects and committed to disclose information about<br />oil leaks publicly. This more recent type of benefit-sharing arrangement incorporates elements of local participation in environmental issues into the prevailing form of philanthropic and paternalistic CSR practices.<br /></p>