• Sunday, April 14, 2024
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UN Pact: NNPC signals shift to sustainable, socially responsible policies

UN Pact: NNPC signals shift to sustainable, socially responsible policies

In a short ceremony on the sidelines of President Bola Tinubu’s session during the Global Africa Business Initiative (GABI) at the United Nations General Assembly (UNGA) in New York, Mele Kyari, head of NNPC Ltd signed the Letter of Commitment, signifying NNPC Ltd’s participation in the UN Global Compact and readiness to run its businesses sustainable.

This is significant not only because it would make the NNPC Ltd the first state-owned national company to sign onto the global initiative, it is committing to sustainable, socially responsible business practices, something the national oil company is not always reputed for. It could also signal, that the corporation, long accused of being opaque may now be ready to turn the corner.

Read also: UN Global Compact Network partners Dangote Group

What is the UN Global Compact

Launched in 2000, The United Nations Global Compact is a non-binding United Nations pact to get businesses and firms worldwide to adopt sustainable and socially responsible policies and to report on their implementation. Under the Global Compact, companies are brought together with UN agencies, labour groups and civil society.

Its founding principles are Human Rights -Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.

Labour: Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation.

Read also: Naomi E. Nwokolo – Executive Director, UN Global Compact Nigeria

Environment: Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption: Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Through these principles, it seeks to catalyse actions in support of broader UN goals, such as the Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs). It seeks commitments to specific sustainability and social responsibility goals from CEOs and highest-level executives, and in turn, offers training, peer networks and a functional framework for responsibility.

Why it matters

In her remarks shortly after signing on behalf of the UN Global Compact, Naomi Nwokolo, the Executive Director, UN Global Compact Network Nigeria, described NNPC Ltd.’s move to become a participant of the UN Global Compact as a pivotal step in fostering a culture of ethical business conduct, environmental stewardship, and social responsibility.

This strategic alliance provides NNPC Ltd. with an invaluable platform to showcase best practices, engage in collective sustainability initiatives, and contribute substantially to the attainment of the 2030 Agenda. The event will catalyse the adoption of best practices throughout the Nigerian energy sector, fostering a culture of transparency, accountability, and environmental stewardship.

Read also: Sterling Bank reaffirms pledge for sustainability, joins UN Global Compact

Yet, one can only hope. Nigeria is one of the largest producers of crude oil in Africa, a transition from an energy system driven by fossil fuels to one based on renewable energy will have a far-reaching impact on the economy. In the interim, the disposition of the current president and in fact, his policies have been geared towards more drilling, this could conflict with the stated goals of shift towards cleaner energy.

By joining the pact, the NNPC Ltd is pledging an unwavering commitment.

“This momentous development holds profound significance, signifying a substantial leap towards the promotion of sustainable development and ethical business practices within Nigeria’s oil and gas sector,” the UN Global Compact said in its release.

The quiet part about this pact is that companies also committed themselves to ethical business practices. For a company like the NNPC Ltd which has often been abused by successive governments to serve as a patronage system for politicians or other interests, it calls for better business practices.

In the very least, the corporation will actively collaborate with a global community of more than 15,000 like-minded enterprises and over 4,000 non-business entities to advance the United Nations Sustainable Development Goals (SDGs) within Nigeria.

In 2022, the corporation imported petrol with high sulphur content and there are legitimate concerns that its refineries are not being retooled to produce cleaner fuels. It would do more than issue a terse press statement denying unethical practices but must transparently give an account of its operations.

“We are confident that NNPC Limited’s participation will catalyse the adoption of best-in-class practices throughout the Nigerian energy sector, fostering a culture of transparency, accountability, and environmental stewardship…”

Read also: Ki-moon appoints Bola Adesola to UN Global Compact board

To foster this culture of transparency and accountability, NNPC Ltd. like its peers signed on to the pact is under obligation to publish its audited financial statements as well as begin publishing its operations and financial reports which gives a window to its activities.

This also requires that the organisation provide lawmakers on oversight function, with clear and unambiguous answers to questions about its operations. It further requires that it must let the sun into contracts with other operators and agreements including crude swaps, deals such as crude for collateral and proper responses to the audit queries from the Accountant General’s office.

Kyari said that as a dynamic global energy company with businesses and operations spanning the entire energy value chain, NNPC Ltd.’s participation in the UN Global Compact serves as a testament to Nigeria’s commitment to working with global partners to achieve a just Energy Transition.

It’s the company’s actions in the days ahead that will determine its true commitment.