Policy experts in the extractive sector have called on the federal government to ensure that the sector’s successor regulatory agencies hit the ground running with implementation of provisions related to contract transparency and beneficial ownership.
The call was made Friday, at a Virtual Learning Session on Beneficial Ownership and Contract Transparency in Nigeria organized by Policy Alert with support from Open Society Initiative for West Africa (OSIWA).
The Executive Director of Centre for Transparency Advocacy, Faith Nwadishi, noted that publishing contracts and revealing the beneficial owners of extractive industries as provided for in some of the country’s recent legislation would minimize the massive losses to government experienced over the years through illicit financial flows and the corrupt involvement of Politically Exposed Persons (PEPs) in the sector.
Nwadishi charged civil society organisations and resource-rich communities to leverage the provisions of Sections 119-123 and 320 of Company and Allied Matters Act (CAMA) 2020 and Sections 7, 32 and 83 of the Petroleum Industry Act (PIA) 2021 to unravel the real owners of extractive companies and the terms of deals entered with government and communities as a first step toward accountability in the sector.
“These are opportunities for citizens to hold government actors to account, because these are not just policies now, but legislations”, she insisted.
While insisting that the beneficial ownership register hosted by Nigeria’s companies’ registry should be made publicly accessible, Nwadishi decried how mining companies ignore the need to provide Community Development Agreements (CDAs) with host communities as provided by the Nigerian Minerals and Mining Act 2007.
On his part, the Executive Director of Human and Environmental Development Agenda (HEDA), Olarenwaju Suraj said that the case of OPL 245 otherwise known as the Malabu Oil scandal “clearly demonstrates what contract secrecy and dodgy ownership can do to the country’s valued resources.”
Suraj narrated how his organisation had been fighting over the years to unravel the corrupt secrets of the case and bring perpetrators to book, and how corruption had been fighting back. He noted that it was time for civil society organisations (CSOs) and citizens to move beyond pleading for compliance on laws to trying litigations when laws are flouted.
“Where these laws are not respected by companies or when government MDAs flout their own laws, CSOs should try litigation. Test the laws by going to Court to get interpretation of relevant provisions” he said.
Suraj advised that Chinese and Indian companies, whose countries are not members of Extractive Industries Transparency Initiative (EITI) and Open Government Partnership (OGP) should not be exempted from the implementation of laws on beneficial ownership and contract transparency since Nigeria where they operate is committed to those frameworks.
The HEDA helmsman said that some unscrupulous civil servants collaborate with politicians and sometimes extractive companies and aid them to engage in corrupt practices that impact negatively on the extractive sector.
He said: “Poor governance, corruption and abuse of office are not always about the politicians but also the civil servants too. We need information about civil servants’ own perpetrated atrocities in the extractive sector. There is need for a paradigm shift of our focus not looking at only politicians as behind mis-governance but to also investigate the activities of civil servants.
“The truth is that it will be very tough for any politician to get away with any crime in office related to contract or corruption issues without the active conspiracy, collaboration and encouragement of civil servants. We need to start to engage with this level of governance.”
Executive Director of Policy Alert, Tijah Bolton-Akpan, said that while the Petroleum Industry Act (PIA) 2021 contained provisions on disclosure of contract terms and company ownership that could be a game changer in government’s anti-corruption drive in the sector, it will be important for the PIA Implementation Committee to ensure that the right tools, skills and administrative frameworks were in place within the Nigeria Upstream Petroleum Regulatory Commission, the Nigeria Midstream and Downstream Petroleum Regulatory Authority and other relevant agencies government agencies for smooth take off and effective implementation.
He called on the successor agencies under the PIA 2021 to work with other agencies such as NNPC Ltd, Corporate Affairs Commission, the Code of Conduct Bureau, the Nigeria Financial Intelligence Unit and the Mining Cadastre Office, among others, to ensure effective implementation of these transparency and accountability reforms in the oil, gas and mining sectors.
He observed that corruption in the extractive sector, particularly oil and gas, has become an existential threat given the realities of climate change.
He said; “With the imminence of the energy transition, if we do not act fast to plug leakages from the sector, it may soon become too late for the government and resource-rich communities to derive any real benefits as fossil fuels are fast becoming uneconomical, in addition to being unfashionable and unsustainable.”