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NorPetrol Venezuela's Social Investment
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In 1996, NorPetrol arrived in Venezuela, where it started upstream oil operations. The company engaged in corporate social responsibility initiatives to support its operations, choosing its programs after consulting with local stakeholders. Upon arriving in the Paria Gulf area, Francisca Rios, head of the company's Social Investment and Community Relations Coordinating Unit, met with politicians, community leaders, public officials, and grassroots organizations' representatives to learn about their expectations and issues, and to communicate the company's investment plans and projects with a potential impact on their communities. A stakeholder identified by the company was Asopescar, an association of traditional fishermen. Tensions between fishermen and oil companies were commonplace. The former blamed NorPetrol for the degradation of a mangrove swamp and a significant decrease in production during the fishing season. Francisca Rios did not want to build a relationship with the fishermen based on donations and assistance. Intending empower them, she decided to channel a portion of her social investment budget to turn Asopescar fishermen into entrepreneurs. In 2006, Francisca Rios considered that Asopescar had made great progress as a productive, self-sustaining company. However, a number of problems had arisen in the organization, forcing her to rethink upcoming investments of NorPetrol in the association. Problems included rising unpaid debts of Asopecar members with their own organization, member drop-out, administrative chaos and informality in money handling, and high operating costs.The case raises the challenges facing an oil company to achieve a social license to operate, as well as its attempts to secure sustainable community development processes in its areas of influence. It takes place in April 2006, at which time Francisca Rios, wondered what to do with her initiative to support modernization of the productive model of a group of small-scale fishermen.