Industrial Projects and Benefit-Sharing Arrangements in the Russian North. Is Contracting Possible?

Abstract

The extractive industries and local communities in the Russian Arctic make socio-economic agreements to support social and environmental initiatives in the territories of their operations. The extractive industries address social responsibilities through grant projects and social investments. In the framework of social investments, major industrial corporations are supposed to distribute benefits obtained from resource exploitation to stakeholders who are affected by industrial operations. This article presents different forms of benefit-sharing arrangements and how they work in practice in the context of contracting for natural resources (oil, gas, metals and minerals) in Russia. The analysis outlines specific types of contracts and how they are implemented. While benefit-sharing arrangements can provide some benefits for local and regional stakeholders, it is controversial whether these arrangements can improve the situation as far as even-handed sharing of society’s environmental risks, benefits, and impacts is concerned. The article discusses how voluntary social partnership agreements in line with corporate citizenship and stakeholder management can alleviate problems between local people and industries in the Russian Arctic.