Accountability and Sustainability Reporting in a Post-Conflict Region: The Case of the Kurdistan Region of Iraq

Abstract

Sustainability reporting as a practice has gained considerable global recognition and is designed to promote corporate transparency and accountability. However, critics argue that multinational corporations operating in developing societies adopt Western notions of accountability when preparing sustainability reports. Such reports, they claim, fail to consider local conceptualisations (grounded in local beliefs and values) of accountability and thus fail to achieve meaningful accountability to local communities. This challenge is particularly evident in post-conflict regions, where fragile, complex, and often volatile political, social, and institutional realities dictate corporate disclosure practices.

This research, guided by accountability theory and using an interpretive qualitative design, explores the relationship between sustainability reporting and accountability in the KRI. Data comprised 46 semi-structured interviews, including citizens, tribal leaders, mukhtars (government-appointed officials who act as intermediaries between villagers/local communities and the government), non-governmental organisation representatives, local workers, and managers of foreign oil companies (FOCs). Interview data were analysed using thematic analysis to identify key patterns and locally grounded conceptualisations of accountability. In addition, 18 corporate reports published in 2023, including seven sustainability reports and eleven annual reports from FOCs operating in the KRI, were analysed using qualitative content analysis. These reports were examined to assess the extent to which corporate disclosures align with locally defined accountability dimensions, such as Islamic and tribal accountability. Notably, local oil companies (LOCs) do not engage in sustainability reporting in any form, whether through standalone sustainability reports, annual reports, or corporate websites. Thematic analysis guided the analysis of the data collected.

The findings reveal that local stakeholders in the KRI conceptualise accountability as a moral and relational obligation grounded in communal, religious, and social values rather than as a formal, procedural mechanism. In contrast, oil and gas companies, whose operations profit from the exploitation of local natural resources, publish sustainability reports based on global frameworks that conceptualise accountability through economic logics. As a result, sustainability reports that primarily serve the interests of foreign investors offer little, if any, transparency or accountability to local stakeholders who are at the forefront of the sustainability challenges caused by the oil and gas industry.

This study makes several significant contributions to sustainability reporting and accountability literature, particularly in the context of a post-conflict developing region. The study conceptualises accountability for sustainability rooted in Kurdish and Islamic values, challenging Western-centric models and advocating for culturally grounded alternatives. It reveals the gaps between corporate disclosures and local stakeholder interests, beliefs and concerns, and the need to conceptualise accountability through the local stakeholders' collective social, moral, and spiritual views and experiences on corporate behaviour, as opposed to Western models of accountability that focus on relationships between the accountee and the accountor underpinned by economic well-being. Furthermore, local oil companies, which are controlled by the KRI government, fail to publish sustainability reports, indicating little, if any, concern for local stakeholders. Addressing the local stakeholder needs, this research integrates Islamic ethics and communal obligations into the discourse on corporate responsibility, thereby extending both theoretical and practical understandings of accountability for developing and Islamic societies. Finally, practical recommendations are offered for policymakers, standard-setters, and practitioners to enhance transparency and promote inclusive accountability with respect to the information needs of local stakeholders.