Social ImpactEmployment §3.4(d)Social Expenditures §4.1(e)
Along with paying revenues, extractive companies provide employment, execute corporate social responsibility programs, and often seek to address social concerns such as education, community infrastructure or environmental remediation. Key governance challenges associated with social impacts include the enforcement of effective local content policies and community discontent with companies resulting from unmet expectations surrounding industry obligations.
Employment is an important mechanism for ensuring that producing communities receive economic benefits from extraction, though local expectations often surpass the supply of jobs. Social expenditures can help companies improve their social license to operate. The disclosures related to social impacts that are required and/or encouraged under the EITI Standard should be implemented in ways that address national governance challenges and lead to meaningful policy reform.
Potential policy reforms in this area include developing and enforcing local content requirements, expanding local consultations and community monitoring around social projects, and enhancing environmental and social impact assessment systems.
3.4. The EITI Report must disclose, when available, information about the contribution of the extractive industries to the economy for the fiscal year covered by the EITI Report. This information is expected to nclude…
[d] Employment in the extractive industries in absolute terms and as a percentage of the total employment.
EITI Report Data
6.3.3. Employment in the extractive industry
Characteristics of employment in the sectors of economy:
In 2015 the economically active population was 4,915.3 thousand people and among them 4,671.6 thousand people were employed in the economy. The rate of mining industry to employement was 0.8%, which is 39.1 thousand people.
Table 30:Employment in Mining industry
Payments made to SSPF
In accordance with the Memorandum of Understanding in 2015, EITI reported total mandatory premiums paid to SSPF by local and foreign companies as AZN 58.1 million. This information has been obtained from the SSPF by the EITI secretariat.
Graph 11: Employment structure (2015)
In order to promote the development of the Azerbaijani citizens BP and SOCAR signed a cooperation agreement in November 2013 for the provision of the 3 projects (Azeri-Chirag-Guneshli, Shah Deniz, Baku-Tbilisi-Ceyhan and South Caucasus Pipeline).
The agreements re-benefit the two organisations’ commitment to cooperate closely in the areas of nationalisation of BP’s staff, development and training of professionals specialising in petroleum disciplines, and workforce involved in oil and gas development projects in Azerbaijan.
§4.1.e. Where material social expenditures by companies are mandated by law or the contract with the government that governs the extractive investment, the EITI Report must disclose and, where possible, reconcile these transactions.
i. Where such benefits are provided in-kind, it is required that the EITI Report discloses the nature and the deemed value of the in-kind transaction. Where the beneficiary of the mandated social expenditure is a third party, i.e. not a government agency, it is required that the name and function of the beneficiary is disclosed.
ii. Where reconciliation is not feasible, the EITI Report should include unilateral company and/or government disclosures of these transactions.
iii. Where the multi-stakeholder group agrees that discretionary social expenditures and transfers are material, the multi-stakeholder group is encouraged to develop a reporting process with a view to achieving transparency commensurate with the disclosure of other payments and revenue streams to government entities. Where reconciliation of key transactions is not possible, e.g. where company payments are in-kind or to a non-governmental third party, the multi-stakeholder group may wish to agree an approach for voluntary unilateral company and/or government disclosures to be included in the EITI Report.
EITI Report Data
6.1. Social expenditures
Acknowledging its social responsibility, SOCAR is actively involved in the social life of the country and contributes to a number of important socio-economic projects carried out in Azerbaijan Republic. SOCAR invests in provision of social services, establishment of public infrastructure and other similar areas.
Social assistance and protection;
Support to education, culture and sports initiatives;
Support to healthcare;
Support to other state social programs;
Other events envisaged in the internal documents of the Company.
Table 28: SOCAR payments for charity, social and sponsorship purposes in 2015