Between Soviet Legacy and Corporate Social Responsibility: Emerging Benefit Sharing Frameworks in the Irkutsk Oil Region, Russia

Abstract

Benefit sharing arrangements are a central element of the interactions between oil companies and local communities in resource regions of the Arctic and sub-Arctic. This paper focused on developing a systematic understanding and typology of benefit sharing arrangements within the oil sector in the Russian Arctic and sub-Arctic, using the Irkutsk Oil Region as a case study. It provided a critical analysis of prevalent arrangements and practices (modes and mechanisms of benefit sharing), as well as examined institutional and social underpinnings of these benefit sharing frameworks. Qualitative methodology with semi-structured interviews were used. The paper demonstrated that sub-Arctic communities are not equally benefiting from oil and gas extraction. Despite a considerable variety of existing arrangements revealed by this study, no benefit sharing mode or mechanism prevalent today ensures sustainable development of local communities. This may stem from the incompatibility between post-Soviet legacies, corporate social responsibility principles, and local institutional frameworks. Although focused on a particular region, this research was indicative of general benefit sharing patterns in modern Russia and beyond.

Land Resources Evaluation for Damage Compensation to Indigenous Peoples in the Arctic (Case-Study of Anabar Region in Yakutia)

“…But they contribute to the important problem-solving: to determine the fair compensation for damage to the indigenous peoples due to negative mining impact. The issues of compensation and its distribution have yet to be resolved, since this separate important aspect is also not studied in Russia, and there are no legal instruments for this [22].…”

Resource Allocation in Oil-Dependent Communities: Oil Rent and Benefit Sharing Arrangements

“…First of all, there are benefits that communities can gain from companies. These benefits can be passed to a community in various forms: as taxes (formal benefits), as compensation (formal benefits), as private-public partnerships initiated by authorities, companies and indigenous people (semi-formal arrangements), as charity programs (charitable giving), and as side benefits of industrial activity, including the creation of jobs and infrastructure development (trickle-down benefits) [39].…”

“…The second important aspect of entering such agreements is transparency and the participation of local residents in the distribution of benefits. This involves the introduction of transparent and formalized rules that govern the redistribution of benefits [36,38,39].…”

“…This includes the regular evaluation of environmental contamination, changes in the lifestyle, the degree of loss of traditional culture, and the deterioration of the social fabric caused by industrial activity. It has been posited that the level of compensation to a community from a company is proportional to the effects of the industrial activity on the community [30,38,39]. In this study, we address agreements between oil and gas companies and indigenous peoples in Russia.…”

“…It means that the funds received from companies are used both for indigenous people and for the rest of the population living near industrial enterprises. The idea of such agreements is rooted in the Soviet era, when state-owned enterprises were responsible for the social sphere of the settlements in which they operated [5,39].…”