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Multinational corporations (MNCs) operating in developing countries face increasing social and environmental risk. Previous work on how MNCs seek to mitigate these risks has often failed to recognize the complexity and interaction between international, home and host country governance mechanisms. Here, however, changes in corporate environmental behaviour at the site level are evaluated in terms of the dynamics of local and cross‐scale institutionalization processes. The subject of the paper is the contestation of industrial pollution at Shell's Sapref oil refinery in Durban, South Africa. Using a novel research design, institutional and organizational theory is combined with social network analysis to explore how and why Sapref's environmental performance has changed over time. The analysis highlights mechanisms of institutional change and how MNC environmental performance can be contested and …