The author is a former Norwegian diplomat who has served in Moscow, Vilnius, and Washington, D.C. He has also worked as a foreign policy adviser in the Office of the Prime Minister of Norway.

From 1998 to 2000, Mr. Westgaard was Statoil's representative in Washington, D.C. He holds a Bachelor of Arts from the University of Oslo and a Master of International Affairs from Columbia University. He was a Fellow at Harvard University's Weatherhead Center for International Affairs in 1997-98.

Introduction

How can oil, gas and mining projects contribute to sustainable development and poverty reduction? This is the question currently being probed by the World Bank Group in the Extractive Industries Review. It is also a question with which we in Statoil are familiar. It reflects a growing concern among stakeholders about the impact of our activities on people, the environment and society. It affects the general acceptability of oil as a commodity and as a business. It represents new risks for the petroleum industry, risks that could jeopardize our future license to operate unless properly managed.

This paper argues that corporate social responsibility or corporate citizenship - the commitment of business to contribute to sustainable development, working with employees, their families, the local community and society at large to improve their quality of life - is essential for the long-term viability of multinational enterprises in general, and international oil companies in particular. Our ability to do business will be limited unless we can demonstrate that our presence, especially in the poorer countries and the emerging market economies, is a source of human progress.

Corporate social responsibility (CSR) combines strong financial performance with good environmental and ecological performance and socially responsible behavior. It is about sound business practices. It is about how we earn our profits. It is about conducting business in a manner that maximizes benefit and minimizes cost. It is also about delivering what we promise - to employees, to investors, to customers and to everyone with whom we do business. Corporate social responsibility is the concept that business is accountable for its impact on all relevant stakeholders.

In our view, corporate social responsibility does not entail a new role or mission for business. It merely adapts the principles of accountability and responsibility to a global economy characterized by deregulation and privatization, rapid advances in communication technology and the rise in the power of the consumer. CSR can be seen as a means to achieve robust profitability, which implies striking a balance between short-term earnings and long-term growth.

BLOCK 4 - - FORUM 21 49 SECURING A LICENSE TO OPERATE: THE ROLE OF CORPORATE SOCIAL RESPONSIBILIT

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