Managing risks and opportunities in oil and gas industry contracting chains

This project investigated the relationships between multinational oil and gas companies and their local contractors. IIED focused on the environmental and social performance of local contractors and the ways in which multinational oil and gas companies can ensure that sustainable development principles are adhered to along the supply chain.

Project
Archived
,
2007 - 2010
Contact: 
Sarah Best
,

Senior researcher, Shaping Sustainable Markets

Sustainable Markets research group

IIED collaborated with the World Wide Fund for Nature (WWF)-UK, WWF-Russia, SustainAbility, Engineers Against Poverty, and Kazakhstani analyst Saule Ospanova to investigate the relationships between multinational oil and gas companies and their local contractors.

The project focused on the environmental and social performance of local contractors and the ways in which multinational oil and gas companies can ensure that sustainable development principles are adhered to along the supply chain.

What IIED did

IIED's analysis focused on two countries of the former Soviet Union: Russia and Kazakhstan. Our conversations with national and local stakeholders and our research aimed to identify the opportunities, challenges and trade-offs involved in building relations between multinational companies and local contractors, and the implications for sustainable local development.

SustainAbility had been considering the experience of multinational oil and gas companies and their major multinational contractors through conversations with European headquarters and regional offices. In December 2007, WWF-UK, IIED and SustainAbility organised a multi-stakeholder workshop at Chatham House to discuss initial research findings and map possible ways forward for the initaitive over the longer term, with a view to developing initial recommendations on ways to:

  • Create incentives for contractors to meet environmental and social performance standards, avoiding conflicts with budgets and deadlines
  • Enhance the effectiveness of communication and collaboration between international companies and local contractors and suppliers
  • Build the capacity of local contractors and suppliers for good environmental and social performance and enhanced local benefits, and
  • Build the capacity of local NGO, government and research partners to monitor and analyse the situation.

Additional resources

Responsible contracting in the Russian oil and gas industry, Aleksey Knizhnikov, Emma Wilson (2010), WWF, Moscow Report/paper | Русский

Towards good practice in the oil and gas contracting chain: Kazakhstan country reportSaule Ospanova, Halina Ward (2009), IIED Country report | Русский

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