Poverty reduction is one of the key Millennium Development Goals agreed by the United Nations member countries. It has been a hot topic among international organisations, NGOs and governments for over 50 years. But what if people were the real wealth to be cultivated? Views from an academic and member of France’s Institute of Research for Development (IRD) and two members of Total’s Sustainable Development team. (an Article from Total's Energies-No11, Spring 2007)

Development aid has been at the forefront of international politics ever since the African independence movements of the 1950s. Yet initial enthusiasm gave way to questions on its effectiveness and changes to practices. Despite all the investment, developing countries, often rich in natural resources, found it hard to emerge from economic poverty. The trickle-down effect proved more credible in theory than in practice.

And so it was that Africa and Asia remained poor and unable to meet the needs of their populations. A watershed in the history of development aid came in the 1990s when traditional economic models that systematically linked growth and poverty were challenged. A new theory took shape suggesting that inequalities in incomes, rights, living conditions and access to resources drove poverty. At the same time, the concept of “sustainable development”, a watchword today, was gaining ground.

Towards a more professional system
Capability, a poverty reduction tool
From growth to sustainable human development

Towards a more professional system

Target: the large corporations. In addition to the burning environmental issue – multinationals using the natural resources of their host countries – there is the equally sensitive subject of social development. If peaceful cohabitation is to be achieved, the multinationals need to help further social progress in host states. In the Democratic Republic of the Congo (DRC), significant social investment is being directed to the area of Djeno, where a Total-run oil terminal has been in operation for 35 years, storing and shipping over 95% of the country’s crude oil production. Projects include a health centre created by the Congolese institutions with operational costs subsidised by Total, the renovation of a primary school and the installation of a network of water standpoints. But these schemes can only partially meet the population’s real needs since they don’t see the whole local picture. Typically of rural regions in DRC, half of the classrooms in the new school are empty due to a combination of a lack of teachers accepting posts there, inadequate operating budgets, families too poor to give their children school uniforms and equipment – and enough work in the fields that parents prefer to keep their children with them.

So how can new practices be introduced? Amartya Sen, development theorist and 1998 winner of the Nobel Prize in Economics, points to “social choice”, a theory advocated by 18th century French philosopher and mathematician Condorcet. As a Professor of Philosophy and Economics at Harvard, Sen places ethics at the core of the economic debate, largely based on Condorcet’s thinking. The idea of “social choice” is to find the link between individual values and collective choices and then deduce the preferences of society as a whole from the individual preferences. This means that public decisions have to take into account both individual and community needs.

Congo. Exchanges between Djeno fishermen and a Total E&P representative in charge of a lake-fishing development project

Anne-Sophie Leroy, currently Co-ordinator of the Sustainable Development Correspondent’s Network, Total Exploration & Production, has first-hand experience of this in DRC. An agricultural scientist by education, she learnt the development ropes with an NGO before joining the French Embassy in Bolivia and moving on to the Sustainable Development Department of Total Exploration & Production Congo. Talking about her arrival in Djeno, she says, “Investment following dialogue meant that the atmosphere was fairly relaxed, but it was clear that the slightest incident could undermine relations between the subsidiary and the local inhabitants. The community was impatient to see the economic upturn it was counting on.”

Naturally akin to Amartya Sen, Anne-Sophie Leroy decided to apply social choice theory. This entailed a change of practice, already underway prior to Anne- Sophie’s arrival following consultations with the community. If social initiatives were to work, they needed the support and input of the whole community. “It was tough reshaping the relationship between Total and the residents. They saw Total as the rich neighbour with a duty to safeguard the population’s welfare. They were demanding a reduction in the terminal’s environmental impact on the village as well as improved living standards (access to water, electricity and healthcare and economic development for the area.” Further talks gave rise to a redistribution of responsibilities and opened up new horizons. For instance, why was farming not being developed? Total E & P Congo managers and local townsfolk met to identify the causal links between problems. With the situation clarified, they then looked at how, where and with whom to take action. “This made each party’s responsibilities clear,” explains Anne-Sophie Leroy. “It showed that, sometimes, what was expected of the subsidiary was outside its scope of action.”

Similar events played out in Venezuela, where Diana Vilera started work in 2003 in the midst of a serious crisis that brought oil operations to a standstill. Total had obtained a licence to operate in Jusepín in 1999. Start-up had gone smoothly technically speaking, but was fraught with industrial unrest. The finger pointed at the fact that the new terminal had created few local jobs. “Jusepín was recognised around the country as a first-class oilfield. The community felt neglected, cut off from this technological and economic success.” Repeated walkouts and picket lines at the oilfield gates meant sizeable financial losses for Total. “The Group was worried about this breakdown in industrial relations and decided to create a Sustainable Development Department to provide a professional framework for its social approach. Until that point, we had just handed out medicine and toys or organised sports competitions, simply trying to be a ‘good neighbour’.”

A turnaround came when Diana Vilera, an anthropologist and former director of one of Venezuela’s largest NGOs, took the helm of the new department. “Sustainable development was seen as a support action for operations,” she explains. “It was a division, like HR or IT Support, designed as an auxiliary activity to assist at operational level. In situations of serious economic insecurity, communities look to oil companies to subsidise their daily needs and hence offset inadequate public services, especially in rural and semi-urban areas. There is therefore a huge temptation to buy a form of social peace, to satisfy the constant demand for help through handouts. But this definitely isn’t an acceptable solution in terms of human development.”

Capability, a poverty reduction tool

This new century has marked a turning point in Congo and Venezuela with development aid becoming more professional. The company now liaises with the local population and NGOs. The principle is to transform the disparate settlements working on the industrial activity into an autonomous community, and create a development policy to replace a fragile and fragmentary aid system.

Diana Vilera supports Amartya Sen’s argument that low wages alone are not the cause of poverty. For example, Sen showed that famines cannot be explained by a shortage of food alone. In Bengal in 1943, the granaries were full as people were dying of starvation. Certain groups in society had lost their jobs and therefore the capacity to buy seeds for harvest. For Sen, poverty has more to do with a lack of capabilities. These capabilities concern “functionings”, what a person actually does, and “freedoms”, what a person could potentially do. To optimise capabilities, governments need to improve public services such as education, health, transport and energy infrastructures.

A citizen can only take action when such conditions are met. In this way, individual and collective freedoms go hand in hand. This line of thought challenges the traditional economic model, which presents self-interest as the strongest driving force for human activity. Jean-Luc Dubois, a development economist from a similar school of thought to Amartya Sen, gives his interpretation, “Economics focuses on goods and considers consumption, standards of living and incomes. Our approach takes things a step further. It makes the shift from standards of living to living conditions by looking at access to certain services and human and social capital formation. The focus is more on people’s know-how and potential than their resources.” Whereas previous work sought to combat a lack of resources, the focus is now on enriching and cultivating people, who are the most valuable capital we have and whose capabilities make up a country’s wealth.

The notion of capability and its corollary “human development” have prompted education and training initiatives and improvements to infrastructures. As of 2004, projects in Congo can only be launched when they have been decided on by a joint meeting of the community, NGOs and Total. NGOs are enlisted to help members of the community develop and carry through their projects. The subsidiary works with the Congo’s Business Start-Up Forum (FJEC), which teaches the principles of economic self-sufficiency to the local population. The Group also provides funding for agriculture, stockbreeding, women’s work, microcredit and so on to help new concerns get off the ground. Technical, organisational, economic and financial training is also given. This involves a change in attitudes that is as complex for residents as it is for the company. As Anne-Sophie Leroy puts it, “We supported the community for years. Becoming its partner isn’t easy.”  She explains that when a poultry farm was set up to train Djeno’s youth, the students demanded wages one month into training. And when a group of women bought their first groundnut seeds on credit, they could not understand why they had to reimburse the money to the ‘community fund’ after harvest. The participation of NGOs has not been without its complications either. “Initially, the local population believed that Total was unfairly giving money to NGOs. It took a long time for them to understand the support role played by these local structures.”

From growth to sustainable human development

In Venezuela, development aid has also undergone a paradigm shift. “In the early days, the locals were scared that the aid would be cut off. It was granted without any particular plan or social programme, on a case-by-case basis. Although community members were initially wary, they realised we were giving them an opportunity to express their needs, to plan and self-manage their projects, to consult with the NGOs and even to choose which NGOs they worked with.” 

Micro-credit availability and villagers' training have helped develop poultry activities

Diana Vilera’s team adopted a holistic approach to the problems and the results speak for themselves. A mere sponsor yesterday, Total now partners actions taken by the community, which is now moving towards sustainable autonomy. And huge progress has been made by shifting the focus from accomplishments to their impact. In other words, Venezuela’s Sustainable Development Department is concerned with the long-term effects of its actions, which it measures using the Human Development Index introduced in 1990 by the United Nations Development Programme (UNDP) with scientific support from Amartya Sen. While it may seem a far cry from traditional economic tools, the HDI is one of the researcher’s major brainwaves. The UNDP publishes the index annually for all countries to offset the lack of individual and collective welfare in the GDP indicator. It is a comparative measure of standards of living, life expectancy and level of education in countries worldwide. The index can also provide more specific variables on the satisfaction of material needs (food, housing and health) and non-material needs (literacy, decision-making capacity, etc.) to be able to build a profile of a population’s level of capability.

Jean-Luc Dubois speaks very highly of Diana Vilera, “The Venezuelan subsidiary’s impact study uses fascinating analysis and monitoring techniques, which pave the way for original analyses.” Vilera and her team have, in fact, developed a new study tool by focusing mainly on the “sustainability” of actions. On another level, the Sustainable Development team, of which Anne-Sophie Leroy is a member, is making similar progress. Her latest assignment is to gather information on sustainable development best practices within and outside the Group and use this field data to define progressive development aid guidelines. “Following a visit to Diana Vilera in Venezuela, we honed our approach to managing the Djeno community’s expectations. We tailored her work to the country, attitudes and history of relations between the company and the community.” This data networking conducive to tailored actions marks a definite step forward in understanding the issue of development aid.

“It’s not easy to apply a strict framework to our actions, to standardise everything,” explains Anne-Sophie Leroy. “We need to stay in a cycle of continuous learning, have our sustainable development ‘hat’ on at all times. For example, we had to change the way we consulted the Djeno community when we realised the population felt that our usual contacts didn’t represent their interests. We decided to involve other community ambassadors such as tribal headmen, women and young people in addition to the usual village administrative authorities.” This issue isn’t specific to developing countries. “In OECD countries, we ask resident committees for their opinions. Our intention is not to replace the State, but we have learned to diversify our representatives to improve the way we manage relations.”

Total supports community banks managed by villagers providing micro-credits to develop agricultural activities.

The work on managing and anticipating problems to prevent conflict provides a valuable tool for researchers. Jean-Luc Dubois commends this work, pointing out that, “Implementation problems are at the heart of obstacles to social innovation. Social mediation is one of the fundamental aspects of sustainable development.”

Development thinking, just like its practice, operates by a process of iteration with its sights set on the long term. Jean-Luc Dubois’ thinking takes Amartya Sen’s work a step further. “Development is no longer seen as a stand-alone cure-all. We now focus on the sustainability of social development, exactly as we do for the technical side of things.” The French researcher goes on to explain the concept of “sustainable human development”. “For years, we had a totally positive view of development. Today, the focus has switched to equity in development. Development must be totally irreversible, a product of social mediation and intergenerational.” Jean-Luc Dubois, President of the Réseau Impact association, whose brief is to “develop collective intelligence to assist public poverty and inequality reduction policies,” would find it helpful if “the round tables discussing development guidelines drew on the social innovation experiments currently being conducted by large industrial groups.”

Anne-Sophie Leroy and Diana Vilera, both with NGO backgrounds, blow apart general preconceptions. Diana Vilera draws a parallel with a company’s financial and operational resources. “Oil companies are concerned with production. When we concentrate on oil production, we produce oil and do it very well. When these same resources and skills are put to work for a social or societal cause, our management capacities make us highly efficient.” Anne-Sophie Leroy is “pleased that development is part of business. It creates pressure and a real interest in doing things well.” Diana Vilera seconds this, “When you work ‘on the wire’, in the private sector, visible results are crucial: the need to prove yourself improves performance.”

Dubois proffers a whimsical conclusion on his discussions and reading on the two subsidiaries’ social initiatives, “Experience can show you’ve got it all wrong and take you back to square one. It’s rather disheartening, but trial and error is the essence of research, especially in our field!” .

 (Editors: Laure Mentzel and Marie Le Breton)