The Role of Corporate Social Responsibility (CSR) in Libya’s Petroleum Sector and Economic Development

Abstract

Corporate Social Responsibility (CSR) has emerged as a necessary strategic tool for extractive industries intent on reconciling profitability with sustainable development. In Libya, where the petroleum industry generates over 90 percent of export earnings and nearly 60 percent of Gross Domestic Product (GDP), embedding Corporate Social Responsibility CSR into corporate strategy opens a valuable route to strengthen economic diversification, social cohesion, and environmental stewardship. Using mixed methods, this paper includes a systematic examination of socio-economic CSR disclosures and policies, alongside semi-structured interviews of industry executives, policymakers, non-governmental organization (NGO) personnel, and local stakeholders. Case studies from Sirte Basin, Tripoli, and the Waha region show how local community benefits derived from CSR are measurable, including increased local employment, educational infrastructure, access to healthcare, and environmental remediation. While much progress has been made, long-term impacts remain constrained by ongoing challenges of poor regulatory enforcement, political instability, inadequate legitimacy, and dispersed mechanisms for stakeholder engagement. In response to those gaps, this article introduces a proposed comprehensive governance framework that would be established through an enhanced legal reporting requirement for CSR, more effective multi-stakeholder forums to facilitate engagements among external stakeholders, and new models of cooperation between public and private sectors that reflect national development objectives. A recognition of CSR provides the opportunity, in the future, for the strategic use of CSR with respect to the petroleum sector in Libya, and to promote resilient economic growth, social stability, and environmental stewardship in a post-conflict nation.