Corporate Social Responsibility at Niko Resources Essay

Appraisal 2

Accounting Issues and Theories

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Table of Contentss

Executive Summary… … … … … … … … … … … … … … … … … … .3

Social and environmental coverage and Corporate Social Responsibility… … … .4

History of societal and environmental coverage… … … … … … … … … … … .4

The importance of coverage, company ‘s duty & A ; answerability… … … … 4

Legitimacy… … … … … … … … … … … … … … … … … … … … … .5

1.Bounds and norms of society & A ; societal contract… … … … … … … … … .5

2. Cost of illegtimacy when the societal contract… … … … … … … … … … 6

Dilemma… … … … … … … … … … … … … … … … … … … … … ..6

Utilitarianism… … … … … … … … … … … … … … … … … … … … ..6

Deontology… … … … … … … … … … … … … … … … … … … … … 7

Libertarianism… … … … … … … … … … … … … … … … … … … … .7

Virtue… … … … … … … … … … … … … … … … … … … … … … ..7

Solutions and Recommendations… … … … … … … … … … … … … … .8

Decision… … … … … … … … … … … … … … … … … … … … … 8

Bibliography… … … … … … … … … … … … … … … … … … … … ..9

Executive sum-up

Here in this instance survey we elaborate and suggest what we believe is true and harmonizing to the information that was available from different beginnings. This is a instance survey fundamentally about a Canadian Oil company working in Bangladeshi gas mine in Syllut. The Canadian Oil company Niko Resources has some dubious history of graft and corruptness in SA every bit good. Somehow they have managed to acquire the contract by outbidding some of the world’s largest Mining companies.

The history of runawaies is of import to cognize that it took dramas January 7 and June 25, 2005 at Tagratilla Gas field. It cause one million millions of dollars harm to the gas field and harmonizing to Bangladesh functionaries Niko resources are responsible for this incident. Bangladesh filed a instance in 2008 and claimed a brawny sum of 106 million dollars in compensation for the amendss. International Centre for colony of Disputes a Us based universe bank organic structure intervened and has tried to decide this issue.

Mean while it is indispensable to cognize the duty and Accountability of Company and whom it has to describe. What are the factors and stakeholders involved in this instance? Effectss of such incidents on local people and environment. How legitimacy theory applies to this instance and company’s legitimacy is lost or after counterbalancing they have paid the monetary value?

We have tried to discourse all these issues in item and hopefully came up with solutions and recommendations for future concern.

Social and surroundmental coverage and Corporate Social Responsibility

History of societal and environmental coverage

These yearss, there is a turning concern about the societal and environmental impacts of the operation of companies worldwide ( Yongvanich & A ; Guthrie, 2006 ) . As a consequence, companies have to bring forth societal and environmental coverage to “secure their right to run from society” ( Yongvanich & A ; Guthrie, 2006 ) .

Harmonizing to Branco & A ; Rodrigues ( 2007 ) , the high spot of sustainability and corporate societal duty ( CSR ) indicates the significance of information revelation of companies and besides contributes to the function of company’s answerability to the populace. Gray et Al ( 1996, cited in Branco & A ; Rodrigues 2007 ) specify corporate societal and environmental coverage as the “process of pass oning the societal and environmental effects of organizations’ economic actions to peculiar involvement groups within society and to society at large” . The activities run by the company might impact stockholders, employees, community and other stakeholders. In other word, the corporate societal and environmental coverage is the revelation of information about the company’s activities to the populace ( Branco & A ; Rodrigues, 2007 ) .

While some may reason that net income is the major concern of corporations therefore fiscal coverage is more of import. However, the truth is economic activities have caused many societal and environmental issues ( Yongvanich & A ; Guthrie, 2006 ) and companies are runing in societal norms and bounds known in a system-oriented position ( Deegan, 2014 ) , hence, they need to conform to regulations set by the society. Subsequently, non-financial or non-economic public presentation coverage is important.

The importance of coverage, company ‘s duty & A ; answerability

There are many benefits that companies can bask when they focus on the balance of economic and non-economic public presentation. First, the work of publicising societal and environmental studies makes organisations “more accountable, democratic and crystalline to stakeholders” ( Yongvanich & A ; Guthrie, 2006 ) . Second, it contributes to the decrease in “waste coevals, energy ingestion and efficient usage of resources” of a company ( Baxi & A ; Ray, 2009 ) . Consequently, it will assist to cut down cost and increase net income. In add-on, in a long term, companies will be runing more efficaciously thanks to the efficiency of environmental direction ( Baxi & A ; Ray, 2009 ) . In short, the revelation and coverage of societal and environmental information have ten major aims: deriving legitimacy to stakeholders ; guaranting company’s transparence and answerability ; bettering corporate edibleness and repute ; bring forthing stakeholder value ; hiking the function of houses in CSR ; increasing market portion and trade name repute ; associating societal and fiscal activities ; bettering company’s capacity, accomplishments and attitudes ; and following planetary criterions ( Baxi & A ; Ray, 2009 ) .

The involvement in societal and environmental coverage of corporations has now been spread throughout different channels, particularly media ( Tagesson et al, 2009 ) , which has put force per unit area on organisations in the fright of their negative action might be disclosed to the public via mass media unless they publicize societal and environmental effects of their economic activities.

Harmonizing to Madalina ( 2010 ) , “corporate societal duty becomes more of import in the context of the planetary fiscal and economic crises because public assurance in the societal and environmental duty of concerns has been shaken” . As a consequence, it is indispensable that comptrollers need to concentrate more on bring forthing non-financial studies so as to guarantee sustainability and effectivity and efficiency of the company in a long term ( Madalina, 2010 ) .

In short, the function of societal and environmental and sustainability/CSR coverage is going more important than of all time since it helps companies to derive fight and demo their duty and answerability to different involvement groups and society.


Niko Resources LTD is a transnational oil and gas company. They had societal and environmental incident, which is runawaies at a gas field in Bangladesh at 2005, and the sensitivity non to unwrap their non-financial information and one-year study caused its incident. In this chapter, we are discoursing in this societal environment sing with legitimacy theory.

  1. Boundaries and norms of society& A ;societal contract

The rules of the societal duties for companies are two things approximately talking. First, companies and its members must non go against the legal right of others by their operation. Second, companies and its members must hold duty for the impact of their operation to people related to its activity. In Niko`s instance, the duties of societal environment are the safety and wellness of its contractors, the communities and employees affected by their operations, harmonizing to its ain web site ( 2014 ) . Particularly, the safety operation is the most important edge for oil and gas companies because they have possibility of environmental accidents such as gas detonation, runawaies, chemical leaks and oil spills. In a word, safe operations are the most of import bounds and norms of society.

In add-on, companies and its directors have to do net income and prolong long term involvements for stakeholders. In other word, Niko has duty for stakeholder to try for doing maximal net income by direction. However it must be just direction and trade sing against societal contract. This bounds and norms means companies must non run its portion monetary value including to related companies by all manner. Niko is besides must non set up it even if it manage in abroad.

Companies must disclosure one-year study, fiscal study, non-financial study and all information to the all party. It is included client, provider and even neighbouring occupants. The party have right to cognize what, when, where, how they operate companies and companies must transport out Accountability.

  1. Cost of bastardy when the societal contract

On 8ThursdayJanuary, 2005, Niko cause a gas detonation accident and 10 thousand people fled from gas field which was 1000000s of three-dimensional field. And the gas field burnt for a twosome of month. Second runaway occurred at 17ThursdayJun, 2005 and 77 households lost their house and its human rights issue is Niko hard-pressed tonss of affected people who do non hold any incrimination. Consequently, a entire sum harm of both runawaies was USD $ 50-60 million and Niko paid to Bangladesh authorities a check of CAD $ 75,000 as compensation for the 625 households of this catastrophe. ( Nasreen et Al, 2006 ) . Additionally, the harm of Earth and ecology might be much greater than its fiscal loss although it can non mensurate as currency.

Niko engaged dialogue for a gas monetary value contract with the Bangladesh authoritiess. Niko`s Bangladesh subordinate bribed curate of energy of Bangladesh a $ 190,000 gorgeous vehicle and paid about $ 35,000 travel cost for the Minister to Calgary for an oil and gas expounding event and to go to run into their household to the United States ( Radford, 2012 ) . After the status of a secret plan being discovered, Niko paid $ 9,499,000 as graft punishment.

Niko did non supply the party some information about environmental revelations which is clearly environmental contingent liability disclosures within one-year studies ( Muhammad, 2010 ) . As a consequence, Niko lost trust from party and made a cause to cut down its portion monetary value although they did non hold any legal punishment in this job.


  • Affects on Bangladesh environmental incidents
  • Government grants to the affected households.
  • Affects on labour market
  • How stockholders respond to the determination
  • How company justifies its determination ethically?


  • Impact of company after the incidents
  • Greatest felicity for the greatest figure of people
  • Affects of company determination on top and lower degree direction
  • How the interest holders including providers, stockholder and creditors respond to the Ethical and environmental issues?
  • How the people of small town suffer after the gas field burnt and non allowed to utilize the tubing Wellss?
  • Was the company’s work worthwhile in Bangladesh after the incident?
  • How the determination was translated to the people of Bangladesh.


It is concerned with the responsibilities and duty of single and companies towards others

  • Company’s duty and responsibility towards its employees
  • Duty towards Bangladesh economic system
  • Duty towards the environment
  • Duty towards stockholders
  • Duty towards interest holders including internal and external stakeholders
  • Duty towards endurance and traveling concern
  • Duty towards legal conformity including compensation and redundancy cost.
  • Government responsibility towards Labor


It is concerned with the freedom of companies and single

  • Niko’s Resource Ltd was free to run their concern harmonizing to their will.
  • Copying up with increasing costs and globalisation
  • Survival of the company at interest
  • Past illustration Perth excavation company Forge Group collapsed losing 1400 occupations
  • Making the right determination!


It is concerned with determination being just

  • Environmental friendly determination as it was a immense doll to dirt and ecology
  • Is it just for the people who lost their places in fled
  • Replacement of $ 50-60 Million of gas to $ 75000

Definition of CSR:

A construct whereby companies integrate societal and environmental concerns in their concern operations and in their interaction with their stakeholders on a voluntary footing.

Bing socially responsible means non merely fulfilling legal outlooks, but besides traveling beyond conformity and puting more into human capital, the environment and the dealingss with stakeholders.

Different accounting theories will supply alternate accounts about

Why an entity might make up one’s mind to describe societal and environmental information

Solutions and Recommendations

Incidents like these should non go on due to their monolithic effects. It has cause so much damaged to the general populace and the company. There should hold to be developing plans and fire drills to educate the staff working on site and people around such countries to do them fix for blasts like these. All the people should hold to counterbalance as they have lost many lives.

Somehow incidents like these are inevitable but all the precautional steps should be taken to avoid such black state of affairs in future. Bangladesh Government should implement stick safety Torahs on Mining sites like these and should implement these on precedence footing. On the other manus Niko Company should utilize latest engineering and new machinery in day-to-day everyday work. All the informations should be up to day of the month and safety safeguards should be maintained.


These blasts in Tingratilla Gas field has made a immense impact on Bangladesh and on the other manus it has raised many inquiries on Niko Company’s credibleness. It has non because million of dollars of lose but has taken many cherished lives. Incidents like these should be investigated decently on every degree and responsible people should be held accountable so it should non go on in future. Meanwhile Bangladesh authorities should reconsider their regulations and ordinances sing critical issues like these for the safety of general public and society.


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Poverty, Environment and Sustainable Development in Bangladesh.

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