Our goal is to ensure the CSR vision in the Region is aimed at building sustainable social development initiatives that are impactful for host communities and in line with the Kurdistan Regional Government’s development plans.
Aamina’s strong local network is centered on first developing and conducting well-planned impact assessments studies while engaging key stakeholders in a participatory approach. Building multi-stakeholder relations with government bodies on a national, governorate, district, and sub-district level, and deepening our local knowledge and understanding of the pressing socio-economic needs of the Region, allows us to identify areas where the private sector can add social value and impact. In addition, we believe in building strategic partnerships with NGOs, community based organizations and academia to ensure the right mix of tools, methods, and programs are thoroughly rolled out in a wide array of focus areas. Aamina’s team is trained to offer a methodical and culturally appropriate approach to community engagement and implementation of outreach programs.
Kurdistan Region of Iraq Current Outlook
The leadership of Kurdistan has demonstrated a clear vision for the Region and has proven their decision-making abilities. The KRI has successfully embarked on its journey to democratic and institutional building. The path to attaining an inclusive culture of democracy, strong governance, and a process of decision-making is beneficial to the Kurds, and the oil sector represents a security token for this process.
The tensions and lack of trust between the Central Government and the KRG threaten the Region’s socio-economic prosperity. The budgetary sanctions and halt to Kurdish oil exports for instance are economic problems linked to political problems with a bleak “lose-lose” end result: an oil pipeline together with a reconciliation pipeline would guarantee and secure the economic progress of the Region.
Debate over Oil and Gas Resources
This current political stalemate is manageable and can be solved with mutual compromises. Kurdistan has a constitutional right to extract the natural resources of this Region, and has no intention to relinquish those rights, as reaffirmed by Prime Minister Nechirvan Barzani’s recent statements.
The stakes facing the Kurdistan Region in reaching a power sharing and revenue sharing agreement with Baghdad are key to achieving its own growth and development vision, and ensuring that the oil is in fact a “blessing” rather than a “curse”. The inability to agree on a common hydrocarbon law and disagreements over interpretations of the Constitution’s articles over natural resource administration and management have steered the attention away from the vital question: how will the oil and gas wealth be used to achieve sustainable and progressive socio-economic growth for the KRI?
The Role of CSR
The oil and gas sector is exposed to a wide range of reputational risks and controversial implications: environmental, economic, cultural and social concerns and their impacts on host communities.
In this context, CSR underpins a company’s commitment to the host country, and aligns corporate strategic goals to regional economic development and environmental sustainability. This isn’t to say that the responsibilities falls on the shoulders of just the government, or the private sector. In fact, all stakeholders must share the burden of re-building the Region, and securing the future of coming generations. Encouraging private sector investments is key to securing a self-sustainable and vibrant economy that is not solely dependent on oil.
Regulating CSR is counter-intuitive since CSR is inherently based on voluntary action. Nevertheless, a coordinated CSR framework, supplemented by best practice standards, would incite companies to participate in broader and more impactful CSR initiatives. So far, International Oil Companies (IOC)operating in Kurdistan have not taken notice of the importance of collaborating and putting out the necessary resources. Rather than waiting for the issuance of guidance and standardized regulations, IOCs have the opportunity to act as pioneers and thought leaders in the Region.
Human Capacity Building
Building the educational pipeline is as important as building the oil pipeline. Developing capabilities ought to be at the forefront of CSR agendas in KRI. Building local capacity is a responsibility of the IOCs as it is included in the Production Sharing Contracts. Due to some political, logistical, and economical challenges, most IOCs are compelled to focus on operational and technical challenges before building local capacity and addressing the shortage of skilled labor.
In addition, the mismatch of skills between jobs supply and demand is one of the most compelling business issues facing today’s economy. On one hand, there is heightened pressure from a growing labor force that largely comprises of young people under the age of 29. On the other hand, the skills available do not coincide with market requirements. Particularly, a growing youth population increases youth unemployment. The abundance of oil income has led to large public sectors as the principal destinations for educated youth. The education system has been more focused on issuing diplomas rather than relevant skill formation.
Aamina’s field research and assessments in various parts of the KRI indicate the heightened pressure on oil operators and oil and gas service companies to hire locally. The Ministry’s guidance on localization quotas are increasingly difficult to comply with; local jobs have been provided mainly to low skilled laborers who in turn feel frustrated that they are offered the “bad” jobs. The levels of disconnect amongst expats and local staff is expected to deepen unless serious efforts and programs are put in place to address this challenge.
Whether it is a function of lagging educational infrastructure and outdated curriculum, limited vocational training programs, and the “new to oil culture” syndrome, the skills gap can be addressed through a mix of specialized local content programs and targeted high school and university initiatives, aimed at advancing the local supply chain and increasing the technical and soft skills levels of local talent.
Platform for Collaboration
The skills gap resonates across the whole oil and gas industry, and is closely related to the needs of the business from a long-term perspective. The social responsibility challenge is an opportunity to operate on a broader scale and engage with all levels of the education system. What is required is an integrated and collaborative approach to bridging the skills gap.
The first step would be to establish a multi-stakeholder coalition in Kurdistan that would initiate a serious and constant conversation and form a unified voice for the industry, where knowledge, ideas, and best practices are shared. The objective is to create a platform for dialogue with companies facing similar corporate responsibility challenges. They are able to leverage more resources, skills, influence and attention focused on addressing particular priorities.
A multi-stakeholder coalition would: Focus on Industry Demands: business leaders join forces to make the business case and drive the agenda of building human capital to reach cost effective and comprehensive solutions; designing specialized and multidisciplinary training and apprenticeship programs for a larger impact, reach and economies of scale.
Identify and disseminate best practices: providing examples of what has worked and how to embed a company’s corporate goals with society’s sustainability requirements; meeting of the minds on common cause and goals through regular brainstorming sessions.
Elevate norms and standards: members working jointly to advocate for progressive industry guidelines and standards that create a level playing field, and achieve a sustainable industry.
Develop future leaders of the oil and gas industry: provide a space to establish strong internal and external mechanisms and strategic partnerships that would build a strong reputation about the industry; attract more talented people to it, and make young students consider this a career choice.
The oil and gas industry has a vested business interest and a social responsibility to tackle the workforce capability challenge, through transparent and open dialogue, and steering of collective resources and attention. Companies all over the Middle East are putting a renewed focus on building capabilities, not just finding them. The “war for talent” is shifting to what is now the “war to develop talent.” CSR initiatives can act as the catalyst for economic growth and prosperity.